The deadline for compliance with both US FATCA and UK FATCA fast
Cayman entities which are classified as Financial Institutions
are within the scope of FATCA. A typical Cayman fund will fall
within the definition of a Financial Institution, however there are
many other Cayman entities and structures which may be caught by
the FATCA definition which is wider than the normal meaning of the
All Cayman entities should consider their classification for
FATCA purposes. Classification can be a difficult exercise and
further guidance is available from Harneys if required. In most
cases, we can provide a fixed quote for provision of this
In relation to US FATCA, entities which fall within the
definition of a Financial Institution but which have either no US
sourced income and/or no Specified US Persons (as defined under
FATCA) as shareholders, partners, unitholders, investors, or other
account holders (each an "investor") will still need to
comply with the requirements set out below. Similarly, entities
which fall within the definition of a Financial Institution but
which have no Specified UK Persons will still be required to comply
with UK FATCA.
The Cayman implementation legislation contains financial and
criminal sanctions for failure to comply.
A Cayman entity which is required to comply with FATCA has the
1. Register online with the IRS by December 22, 2014 to obtain a
Global Intermediary Identification Number (GIIN). Failure to obtain
a GIIN by December 22, 2014 may have the result of a 30 per cent
withholding imposed by certain counterparties on US sourced
2. Appoint a Responsible Officer. The Responsible Officer will
be required to deal with the IRS online registration, certify that
certain information (entered as part of the online registration) is
accurate, and certify that the Cayman entity will comply with its
3. Implement a comprehensive FATCA compliance program and carry
out due diligence on investors in order to meet the reporting
4. Report relevant FATCA information to the Cayman Islands Tax
5. The first reporting year is 2014 and so the first round of
information will require to be supplied to the Cayman Tax
Information Authority by 31 May 2015 in relation to US FATCA.
Cayman entities with no reportable investors must make a filing to
that effect by 31 May 2015.
Where a continuing offering is being made by a fund to
investors, offering and subscription documents should be reviewed
by Cayman Islands legal counsel and revised to notify investors of
the impact of FATCA and to ensure that investors provide
information which will enable that fund to carry out its FATCA due
diligence. Harneys can provide a fixed quote for this service.?
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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