A. Financial Institution (FI)- The term FI means any fi nancial institution that is a:
1 Depository institution: Accepts deposits in the ordinary course of banking or similar business.
2 Custodial institution: An entity that as a substantial portion of its business, holds fi nancial assets for the
account of others and where the entity's gross income attributable to holding fi nancial assets and related
fi nancial services equals or exceeds 20 percent of the entity's gross income during the shorter of-
(a) The three-year period ending on December 31 of the year preceding the year in which the determination
is made;
(b) The period during which the entity has been in existence before the determination is made)
3 Investment entity : Conducts a business or operates for or on behalf of a customer for any of the following
activities: (a) Trading in money market instruments, foreign exchange, foreign currency,etc. (b) Individual
or collective portfolio management. (c) Investing, administering or managing funds, money or fi nancial
asset on behalf of other persons. [OR] The gross income of which is primarily attributable to investing,
reinvesting, or trading in fi nancial assets, if the entity is managed by another entity that is a depository
institution, a custodial institution, a specifi ed insurance company, or an investment entity described herein.
An entity is treated as primarily conducting as a business one or more of the 3 activities described above, or
an entity's gross income is primarily attributable to investing, reinvesting, or trading in fi nancial assets of the
entity's gross income attributable to the relevant activities equals or exceeds 50 percent of the entity's gross
income during the shorter of: (i) The three-year period ending on 31 March of the year preceding the year in
which the determination is made; or (ii) The period during which the entity has been in existence.
4 Specifi ed Insurance company: Entity issuing insurance products i.e. life insurance or cash value products.
5 Holding company or treasury company: Is an entity that is a holding company or treasury centre that
is a part of an expanded affi liate group that includes a depository, custodial institution, specifi ed insurance
company or investment entity
B. Direct Reporting NFE: means a Non-fi nancial Entity (NFE) that elects to report information about its direct
or indirect substantial U.S. owners to the IRS
C. GIIN not required: Categories with codes
Code Sub-Category
01 Governmental Entity, International Organization or Central Bank
02 Treaty Qualifi ed Retirement Fund; a Broad Participation Retirement Fund; a Narrow
Participation Retirement Fund; or a Pension Fund of a Governmental Entity, International
Organization or Central Bank
03 Non-public fund of the armed forces, an employees' state insurance fund, a gratuity fund or
a provident fund
04 Entity is an Indian FI solely because it is an investment entity
05 Qualifi ed credit card issuer
06 Investment Advisors and Investment Managers
07 Exempt collective investment vehicle
08 Trustee of an Indian Trust
09 FI with a local client base
10 Non-registering local banks
11 FI with only Low-Value Accounts
12 Sponsored investment entity and controlled foreign corporation
13 Sponsored, Closely Held Investment Vehicle
14 Owner Documented FI
D. Non-Financial Entity (NFE): Entity that is not a fi nancial institution (including a territory NFE). Types of NFEs
excluded from FATCA reporting are as below:
1. Publicly traded corporation (listed company): A company is publicly traded if its stock are regularly
traded on one or more established securities markets.
2. Related entity of a listed company: The NFE is a related entity of an entity of which is regularly traded
on an established securities market;
3. Active NFE: (is any one of the following):
Code Sub-Category
01 Less than 50 percent of the NFE’s gross income for the preceding fi nancial year or other appropriate
reporting period is passive income and less than 50 percent of the assets held by the NFE during
the preceding calendar year or other appropriate reporting period are assets that produce or are
held for the production of passive income;
02 The NFE is a Governmental Entity, an International Organization, a Central Bank, or an entity
wholly owned by one or more of the foregoing;
03 Substantially all of the activities of the NFE consist of holding (in whole or in part) the outstanding
stock of, or providing fi nancing and services to, one or more subsidiaries that engage in trades or
businesses other than the business of a Financial Institution, except that an entity shall not qualify
for NFE status if the entity functions (or holds itself out) as an investment fund, such as a private
equity fund, venture capital fund, leveraged buyout fund, or any investment vehicle whose purpose
is to acquire or fund companies and then hold interests in those companies as capital assets for
investment purposes;
04 The NFE is not yet operating a business and has no prior operating history, but is investing capital
into assets with the intent to operate a business other than that of a Financial Institution, provided
that the NFE shall not qualify for this exception after the date that is 24 months after the date of
the initial organization of the NFE;
05 The NFE was not a Financial Institution in the past fi ve years, and is in the process of liquidating its
assets or is reorganizing with the intent to continue or recommence operations in a business other
than that of a Financial Institution;
06 The NFE primarily engages in fi nancing and hedging transactions with, or for, Related Entities that
are not Financial Institutions, and does not provide fi nancing or hedging services to any Entity that
is not a Related Entity, provided that the group of any such Related Entities is primarily engaged in
a business other than that of a Financial Institution;
07 Any NFE is a ‘non for profi t’ organization which meets all of the following requirements:
● It is established and operated in its jurisdiction of residence exclusively for religious, charitable,
scientifi c, artistic, cultural, athletic, or educational purposes; or it is established and operated
in its jurisdiction of residence and it is a professional organization, business league, chamber
of commerce, labor organization, agricultural or horticultural organization, civic league or an
organization operated exclusively for the promotion of social welfare;
● It is exempt from income tax in India;
● It has no shareholders or members who have a proprietary or benefi cial interest in its income
or assets;
The applicable laws of the NFE’s jurisdiction of residence or the NFE’s formation documents require that, upon
the NFE’s liquidation or dissolution, all of its assets be distributed to a governmental entity or other non-profi t
organization, or escheat to the government of the NFE’s jurisdiction of residence or any political subdivision
thereof.
4. Exemption Codes for U.S. persons:
5 Holding company or treasury company: Is an entity that is a holding company or treasury centre that is a part
of an expanded affi liate group that includes a depository, custodial institution, specifi ed insurance company
or investment entity
B. Direct Reporting NFE: means a Non-fi nancial Entity (NFE) that elects to report information about its direct or
indirect substantial U.S. owners to the IRS
C. GIIN not required categories with codes
Code Sub-Category
A An organization exempt from tax under section 501(a) or any individual retirement plan as defi ned
in section 7701(a)(37)
B The United States or any of its agencies or instrumentalities
C A state, the District of Columbia, a possession of the United States, or any of their political
subdivisions or instrumentalities
D A corporation the stock of which is regularly traded on one or more established securities markets,
as described in Reg. section 1.1472-1(c)(1)(i)
E A corporation that is a member of the same expanded affi liated group as a corporation described
in Reg. section 1.1472-1(c)(1)(i)
F A dealer in securities, commodities, or derivative fi nancial instruments (including notional principal
contracts, futures, forwards, and options) that is registered as such under the laws of the United
States or any state
G A real estate investment trust
H A regulated investment company as defi ned in section 851 or an entity registered at all times during
the tax year under the Investment Company Act of 1940
I A common trust fund as defi ned in section 584(a)
J A bank as defi ned in section 581
K A broker
L A trust exempt from tax under section 664 or described in section 4947(a)(1)
M A tax exempt trust under a section 403(b) plan or section 457(g) plan
14 Owner Documented FI
E. Other defi nitions
1 Related entity: An entity is a related entity of another entity if either entity controls the other entity or the two
entities are under common control. For this purpose, control includes direct or indirect ownership of more than
50% of the vote or value in an entity.
2 Passive NFE: The term passive NFE means any NFE that is not (i) an Active NFE (including publicly traded
entities or their related entities), or (ii) a withholding foreign partnership or withholding foreign trust pursuant
to relevant U.S. Treasury Regulations.(Note: Foreign persons having controlling interest in a passive NFE are
liable to be reported for tax information compliance purposes)
3 Passive income: The term passive income means the portion of gross income that consists of: (a) Dividends,
including substitute dividend amounts; (b) Interest; (c) Income equivalent to interest, including substitute
interest and amounts received from or with respect to a pool of insurance contracts if the amounts received
depend in whole or part upon the performance of the pool; (d) Rents and royalties, other than rents and
royalties derived in the active conduct of a trade or business conducted, at least in part, by employees of the
NFE; (e) Annuities; (f) The excess of gains over losses from the sale or exchange of property that gives rise
to passive income described in this section.; (g) The excess of gains over losses from transactions (including
futures, forwards, and similar transactions) in any commodities, but not including: (i) Any commodity hedging
transaction, determined by treating the entity as a controlled foreign corporation; or (ii) Active business gains
or losses from the sale of commodities, but only if substantially all the foreign entity’s commodities are property
(h) The excess of foreign currency gains over foreign currency losses; (i) Net income from notional principal
contracts; (j) Amounts received under cash value insurance contracts; (k) Amounts earned by an insurance
company in connection with its reserves for insurance and annuity contracts
4 Controlling persons: Controlling persons are natural persons who exercise control over an entity. In the
case of a trust, such term means the settlor, the trustees, the protector (if any), the benefi ciaries or class
of benefi ciaries, and any other natural person exercising ultimate effective control over the trust. In the
case of a legal arrangement other than trust, such term means persons in equivalent or similar positions.
The term “Controlling Persons” shall be interpreted in a manner consistent with the Financial Action Task
Force recommendations.
5 Specifi ed US Persons – Any US Person other than i). A publicly traded corporation; ii). A corporation that is a
member of the same expanded affi liate group; iii). A tax exempt organization; iv). an individual retirement plan;
v). the United States or an agency or instrumentality of the United States; vi). Any state [including District of
Columbia and United States possession] or State Authorities; vii). A bank, viii). A real estate investment trust;
ix). A regulated investment company; x). an entity registered with the SEC under the Investment Company Act
of 1940; xi). A common trust fund; xii). A tax exempt trust; xiii). A registered dealer; xiv). A registered broker
6 Expanded affi liated group: Expanded affi liated group is defi ned to mean one or more chains of members
connected through ownership (50% or more, by vote or value, as the case may be) by a common parent entity
if the common parent entity directly owns stock or other equity interests meeting the requirements in at least
one of the other members.
7 Owner documented FI: An FI meeting the following requirements:
(i) The FI is an FI solely because it is an investment entity; (ii) The FI is not owned by or related to any FI that
is a depository institution, custodial institution, or specifi ed insurance company; (iii) The FI does not maintain
a fi nancial account for any nonparticipating FI; (iv) The FI provides the designated withholding agent with all
of the documentation and agrees to notify the withholding agent if there is a change in circumstances; and
(v) The designated withholding agent agrees to report to the IRS (or, in the case of a reporting Model 1 FI,
to the relevant foreign government or agency thereof) all of the information described in or (as appropriate)
with respect to any specifi ed U.S. persons and (2). Notwithstanding the previous sentence, the designated
withholding agent is not required to report information with respect to an indirect owner of the FI that holds its
interest through a participating FI, a deemed-compliant FI (other than an owner-documented FI), an entity that
is a U.S. person,an exempt benefi cial owner, or an excepted NFE.
Defi nitions/ Instructions / Guidance
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Mutual Fund India
Mutual Fund India