FI - Depository, or Custodial Institution or Specified Insurance Company (including Non-reporting FIs) | Includes the following types of Financial Institutions 1. Depository Institution An entity that: - Accepts deposits in the ordinary course of a banking or similar business
- Common examples: Banks, credit unions, savings institutions
2. Custodial Institution An entity that: - Holds financial assets for the account of others as a substantial part of its business
- “Substantial” is generally defined as ≥20% of gross income from holding financial assets and related financial services during a specific period
- Common examples: Brokerage firms, trust companies, clearing firms
3. Specified Insurance Company An entity that: - Issues or is obligated to make payments under cash value insurance contracts or annuity contracts
- Does not include pure risk insurance (e.g., term life, health insurance)
- Example: A life insurance company offering investment-linked policies
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FI - Investment Entity Located in a non-participating jurisdiction and managed by another FI | Under the Common Reporting Standard (CRS), an entity classified as an FI – Investment Entity located in a Non-Participating Jurisdiction and managed by another Financial Institution is subject to special treatment because it poses a higher risk of being used for tax evasion.
This type of entity must meet all three conditions: 1. It is an Investment Entity - Engaged in activities like trading in financial instruments, portfolio management, or investing, administering, or managing financial assets on behalf of others.
2. It is located in a Non-Participating Jurisdiction - A Non-Participating Jurisdiction is one that has not committed to or implemented CRS.
- These jurisdictions do not automatically exchange financial account information under CRS.
3. It is Managed by another Financial Institution - Its manager (another entity) is a Financial Institution, such as a bank or investment advisor.
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FI - Investment Entity Located in a participating jurisdiction and managed by another FI | To be classified as this type of FI, the entity must meet the following criteria:
1. Investment Entity - Engaged primarily in: Trading in financial instruments, portfolio or asset management, or investing or administering financial assets on behalf of clients.
2. Located in a Participating Jurisdiction - A Participating Jurisdiction is a country that has committed to implementing CRS and participates in the automatic exchange of financial account information.
3. Managed by another Financial Institution - The entity is professionally managed by another FI (e.g., a fund manager, trustee, or advisor) that performs asset management or financial services for the entity.
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FI - Other Investment Entity | This is an investment entity but do not fall into the more specific CRS classifications, such as: - Investment entities located in a participating jurisdiction and managed by another FI, or
- Investment entities located in a non-participating jurisdiction and managed by another FI
(Example: An entity that is an investment manager or advisor, but not the actual investment fund) |
FI - Sponsored Closely Held Investment Vehicle | An FI – Sponsored Closely Held Investment Vehicle is:
A Financial Institution (FI) that is: - An Investment Entity (e.g., a fund, trust, or special purpose vehicle)
- Closely held – owned by no more than 20 individuals
Sponsored by another Financial Institution (the Sponsoring FI), which: - Registers with the tax authority
- Performs all due diligence, and reporting on behalf of the Sponsored Vehicle
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Active NFE - Publicly Traded or a related entity of a Publicly Traded Entity | An entity qualifies as an Active NFE – Publicly Traded or Related Entity if it is:
1. Publicly Traded NFE: - Its shares are regularly traded on one or more established securities markets.
- Example: A corporation listed on the London Stock Exchange or NYSE.
OR
2. Related Entity of a Publicly Traded NFE: - An entity that is a member of the same group as a publicly traded NFE.
- It must be controlled (≥50% ownership) by the publicly traded company or other related entities in the same group.
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Active NFE - Government entity or wholly owned by one or more government entities | An entity qualifies as an Active NFE – Government Entity or Wholly Owned by One or More Government Entities if it is either:
1. A Government Entity: - The government of a country or a political subdivision (e.g., state, province, municipality)
- Or an agency or instrumentality wholly owned and controlled by such government
OR
2. Wholly Owned by One or More Government Entities: - An entity entirely owned (directly or indirectly) by one or more government entities
- Must be performing exclusively governmental functions (i.e., non-commercial activities)
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Active NFE - International Organisation | An entity qualifies as an Active NFE – International Organisation if it: - Is established by a formal agreement (treaty) between two or more countries, and
- Is recognized in international law as an intergovernmental organization, and
- Has substantially all activities in performing governmental or public functions, such as:
- Promoting development
- Humanitarian aid
- Economic stability
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Active NFE - Central Bank or enity wholly owned by one or more central banks | An entity qualifies as an Active NFE – Central Bank or Entity Wholly Owned by One or More Central Banks if it is:
1. A Central Bank of issue: - The primary authority responsible for monetary policy, currency issuance, and financial stability in a jurisdiction.
- Examples: Federal Reserve (U.S.), European Central Bank (ECB), Bank of England
OR
2. An entity that is: - Wholly owned, directly or indirectly, by one or more central banks, and
- Engaged exclusively in activities related to monetary or central banking functions, not commercial business
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Active NFE - Other | An entity qualifies as Active NFE – Other if it meets the income and asset test: - Less than 50% of its gross income for the preceding calendar year (or reporting period) is passive income (e.g., dividends, interest, rents, royalties), and
- Less than 50% of the assets held during that same period are assets that produce or are held for producing passive income
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Passive NFE | An entity is classified as a Passive NFE if: - It is not a Financial Institution, and
- It does not meet the criteria for an Active NFE. Specifically, it fails the income and asset test, meaning:
- 50% or more of its gross income is passive income, or
- 50% or more of its assets produce (or are held for producing) passive income
Passive income includes: - Dividends
- Interest
- Rents and royalties (not from active business)
- Capital gains
- Annuities
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