Perhaps a bit lost in the FATCA shuffle, family offices organized as entities outside the United States must also consider their obligations under FATCA.

How FATCA affects a family office depends, first, on whether the family office is organized in a country that has concluded an intergovernmental agreement with the United States. I will focus on that question in a later post. The second major question is whether the family office, as an entity, either (i) acts in a fiduciary capacity for the families it services, (ii) invests or trades in financial assets for the family; or (iii) manages or administers financial assets for the family.

Family Offices As FFIs

It might surprise you to learn that FATCA may consider a family office a “financial institution” subject to FATCA. After all, a family office isn’t a bank or a brokerage.

For instance, family offices may hold financial assets for the benefit of one or more other persons, making them “custodial institutions” under FATCA. A family office also might fit FATCA’s definition of an “investment entity.” So, a Read More