Starting 1st January 2024: all US registered entities have to declare and identify their Beneficial Ownership to the US Financial Crimes Enforcement Network (FinCEN).
What to declare?
Any US entity shall declare and identify all Beneficial Owners over 25% (name, residential address, and passport scan should be given).
Who needs to declare?
Any US entity registered with any Secretary of State is required to declare, and to have an EIN, SSN/ITIN of the owner, or a foreign Tax ID for the declaration. We offer an EIN service if you do not have one.
Is there any exemption?
Yes, all those entities are exempted from the declaration (23 in total):
1. Securities reporting issuer
2. Governmental authority
3. Bank
4. Credit union
5. Depository institution holding company
6. Money services business
7. Broker or dealer in securities
8. Securities exchange or clearing agency
9. Other Exchange Act registered entity
10. Investment company or investment adviser
11. Venture capital fund adviser
12. Insurance company
13. State-licensed insurance producer
14. Commodity Exchange Act registered entity
15. Accounting firm
16. Public utility
17. Financial market utility
18. Pooled investment vehicle
19. Tax-exempt entity
20. Entity assisting a tax-exempt entity
21. Large operating company
22. Subsidiary of certain exempt entities
23. Inactive entity
To clarify: an exempted entity shall file a declaration of exemption.
When to declare?
For new entities: such declaration shall occur within 3 months of incorporation (so in effect, all US entities shall get an EIN within 3 months of incorporation).
For entities existing prior to the 1st January 2024, the deadline for the declaration is: 31st December 2024.
How to escape the Beneficial Ownership Information (BOI) from the US Financial Crimes Enforcement Network (FinCEN)?
We are finally getting to the meat of this article!
- first of all: you have to check if you are not part of the 23 exempted entities. It is important to note here that if your entity is (or becomes) a non-profit tax-exempted entity, then you become an exempted entity (see #19-22 above).
- secondly: if you do not have a US entity, then such declaration is not needed. In other words: if you have a US LLC/Corporation and you re-domicile/continue it outside of the US, the requirement to declare becomes extinct. Another option could be: create a non-US entity, sale/transfer the assets of the US entity, and dissolve the US entity.
- thirdly: if you have a US LLC or US Corporation, it is possible to wrap it within a Trust, in which case: the Trustee will become the declared beneficial owner.
- fourth: depending on your activities it is possible to switch from a registered entity to an unregistered (also called unincorporated) entity.
For implementing any of those strategy: please бидэнтэй холбоо барина уу! Do not delay as it takes some months to deploy a strategy. For new entities we can help too! You can be confident: PROMINEE® has the lowest fees in the industry, with more than 15 years of experience.