Hedge Funds – Upcoming FATCA Compliance Deadlines
This legal update highlights certain important upcoming FATCA compliance deadlines for Cayman Islands funds (i.e., offshore standalone funds, offshore feeder funds, and offshore master funds).
Register with the Cayman Islands on or before April 30, 2015. Each Cayman Islands fund must register with the Cayman Islands on or before April 30, 2015. Funds must register electronically on the Cayman Islands Automatic Exchange of Information internet portal (the “Portal”), which was recently opened for registration. The Portal’s website can be accessed by going to the website www.tia.gov.ky.
Fund managers can register their funds themselves or designate a third party (referred to as a “Principal Point of Contact”) to register the funds (we can do this for managers as well). A letter of authorization is required to be included in the registration if a third party is designated (the letter is submitted as a PDF at the time of registration). Funds need to have previously registered with the IRS and obtained global intermediary identification numbers before registering with the Cayman Islands.
Provide information to the Cayman Islands on or before May 31, 2015. On or before May 31, 2015, each Cayman Islands fund must report information, including name, address, TIN, and account balance, on certain U.S. persons that directly or indirectly own interests in the fund to the Cayman Islands Tax Information Authority. Information is required to be reported on the Portal and then the Cayman Islands will report such information to the Internal Revenue Service.
Even if a Cayman Islands fund has no reporting requirements (i.e., it has no reportable accounts), it must still complete the registration process on the Portal discussed above. The Cayman Islands, however, has indicated that “nil returns” are not required to be filed by a fund that has no reportable accounts.
The Portal will also facilitate UK FATCA registration and reporting, which is not required until 2016. It is anticipated that the Portal will facilitate similar reporting under the Common Reporting Standard as well, which is also not expected to be required until 2016.