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

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.

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.

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

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.

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)

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

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

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

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