FATCA Planning for Foreign Financial Institutions

For "foreign financial institutions" (non-US banks, brokers, and trust companies), developing and implementing a FATCA compliance strategy can be difficult, especially when most US tax advisors only have experience dealing with FATCA from the perspective of their US-based clients. Additionally, for many offshore service providers, FATCA actually isn’t a compliance burden at all—it’s an (often misunderstood) opportunity to better serve your clients.

“Foreign Financial Institutions” are not “Foreign” to me

No US tax advisor can fully comprehend all of FATCA’s implications and compliance strategies. Tax advisors based in the US typically only have experience working with their US-based clients (i.e., banks, funds, insurance companies, and other US withholding agents).

I live in Belize and work with non-US entities and structures on a daily basis.  If you are an offshore service provider or a non-US bank, broker/dealer, insurance company, or other financial institution, I swim in your waters and see the world from your perspective. While “foreign financial institutions” are “foreign” to most US tax advisors, to me they are simply my neighbors and clients.

An Opportunity in Disguise

Many offshore service providers fear that FATCA will scare away even well-meaning US clients.  But FATCA actually provides an opportunity for offshore service providers to distinguish themselves and rise above their peers.

An offshore service provider that knows its way around FATCA and can properly comply with a bank’s request for FATCA disclosure forms has an advantage over those who aren’t able to provide such a high level of service.

Additionally, an offshore trust company can act as a “FATCA sponsor” for its trusts.  FATCA sponsorship is the easiest and most cost-effective way for a non-US trust to achieve FATCA compliance.

Let’s Get Started

Let’s discuss how I can help you avoid FATCA’s potential negative impacts and take advantage of its hidden opportunities.

Stewart Patton