Deemed-compliant Foreign Financial Institution (FFI)
The proposed IRS and Treasury issued regulations expand the categories of deemed-compliant financial institutions to reduce or eliminate the compliance burdens on entities for whom entering into an FFI agreement is not necessary to carry out the provisions of FATCA. The categories of deemed-compliant FFIs are broader than those described in the Notices. The proposed regulations generally provide for the following two types of deemed compliant FFIs:
A "registered deemed-compliant FFI" is required to register with the IRS and declare its status as deemed-compliant and to attest to the IRS that it satisfies certain procedural requirements. This type of deemed-compliant FFI includes certain local banks, qualified investment vehicles, restricted funds, and FFIs that comply with the requirements of FATCA under an agreement between the U.S. and a foreign government.
"Certified deemed-compliant FFIs" includes non-registering local banks, certain retirement plans, non-profit organizations, certain ownerdocumented FFIs, and FFIs with only low-value accounts. These institutions are not required to register with the IRS, but will need to certify to withholding agents that they meet the requirements of their certified deemed-compliant category on Form[s] W-8.