FATCA Letter - Custom House

CUSTOM HOUSE GLOBAL FUND SERVICES LIMITED
May 22 2013
Dear Investment Manager,
Re: Foreign Account Tax Compliance Act (‘FATCA’ or ‘the Act’)
The Custom House Group (‘Custom House’) has been extensively reviewing the final FATCA
regulations, which go into effect on January 1 2014, and other guidance issued by the US
Internal Revenue Service (the ‘IRS’), and has been liaising with legal and tax experts to ensure
we can offer our clients both advice, when necessary, and the services to enable their funds to
comply with the FATCA obligations.
FATCA, as the full name suggests, is legislation aimed at preventing US Persons avoiding their
tax obligations when investing in assets, including investment funds, outside the US. FATCA is
designed to compel non-US funds and financial institutions (‘FFIs’) to share information with
the IRS by imposing a 30% withholding tax on payments of US source income to FFIs. An FFI
may avoid the withholding tax if it becomes a participating FFI (‘PFFI’) by registering with the
IRS and agreeing to provide the IRS with annual information regarding the PFFI’s direct and
indirect US owners or account holders.
In this regard nearly all investment funds have a link to the US, be it they have a US Person as a
shareholder, they have a bank account in the US and / or they trade assets through a US
counterparty.
Considering the pervasive nature of the Act it is generally considered that almost all funds will,
either now or in the future, have a connection with the US which would bring them into the
scope of the Act. The registration process is expected to begin in July of this year with the
initial list of PFFI’s to be released by the IRS in December. Given this, it is Custom House’s
recommendation that all funds should register by October 25, 2013 in order to appear on that
published list of PFFI’s.
Each PFFI will be required to designate a responsible officer (‘RO’) who will be responsible for
registering the fund with the IRS and for ongoing reporting and compliance. The RO must be a
person who has legal authority to act on behalf of the fund.
Note that if a fund is organized in a jurisdiction that is a party to an Inter-Governmental
Agreement (‘IGA’) with the IRS, then, in most cases the on-going reporting will be made to the
taxing authority of the fund’s jurisdiction, which in turn will turn over the information to the
IRS. Otherwise, a PFFI will report information annually directly to the IRS. Most of the
offshore fund jurisdictions have signaled their intent to sign an IGA and we will be monitoring
each jurisdiction to gauge where the reporting for your fund will need to be carried out.
Over the coming months we will be reaching out to you to explain in detail the reporting
requirements and any changes that may be required in the subscription documents to capture
the necessary shareholder information to be FATCA compliant.
As the details of the legislation and its consequent requirements become clearer we will be
providing updates on the Group website www.customhousegroup.com, in the ‘Regulation’
section.
Custom House Global Fund Services Limited | A member of the TMF Group
60 Tigne Towers, Tigne Street, Sliema SLM 3172, Malta | T (356) 2258 2100 | F (356) 2702 2899
info@customhousegroup.com | www.customhousegroup.com | Registered in Malta No. C 43799
Custom House Global Fund Services Limited is regulated by the Malta Financial Services Authority

Finally please note that the above should not be considered legal / tax advice and you
should consider discussing such matters with appropriate legal / tax counsel. To ensure
compliance with requirements imposed by the IRS, we inform you that any information
contained herein is not intended or written to be used, and cannot be used, by any
taxpayer for the purpose of avoiding tax-related penalties under the Internal Revenue
Code.
If you have any questions in relation to the above please contact
Dermot Group Head of Regulatory Affairs, Compliance & Anti Money Laundering
Mockler CHGFS (Ire) Ltd | dermot.mockler@customhousegroup.com | 353 1 8780807
Chris Managing Director
Albright CHGFS (US) Ltd | chris.albright@us.customhousegroup.com | 1 312 2800330
With kind regards,
Yours sincerely
Dermot Mockler
Group Head of Regulatory Affairs, Compliance & Anti-Money Laundering
Custom House Global Fund Services Ltd.
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