Circular/Fragmented ownership structures and the CRS/FATCA?

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Hey OffshoreCorpTalk :)

This is my first post (apart from my introduction) and I thought I'd kick things off by asking a question I've been wondering about for awhile now.

I've read that the CRS defines a 'reportable person' of a passive non-financial entity as a natural person who owns 25% or more of the entity's shares. But what happens when one employs circular/fragmented ownership structures to maintain control over a specific entity while technically owning less than 25% of the entity's shares? To anyone's knowledge, does the CRS/FATCA have a way to look through circular/fragmented ownership structures? Or is this a viable way to get around AEOI?
 
Thanks for the article JohnnyDoe! I'll give it a read tomorrow.

Nominees are an interesting topic as well, although I know very little about the CRS/FATCA procedures for looking through nominees to the UBO. Can you speak to the effectiveness of nominees to avoid CRS/FATCA reporting? The concept of a nominee is so simple and yet its hard to see how banks can prevent themselves from being fooled in the overwhelming majority of cases. I don't see what the ideal solution for banks is when confronting nominees designed to hide the UBO.
 

JohnnyDoe

Mentor Group Gold
If you choose your nominees well, everything will work. Someone will say that it is illegal to use a nominee UBO, so you have to consider if it’s worth the risk. Obviously nobody except you and the nominee should know that you are using a nominee.
 
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