For FATCA, an entity is regarded as being related to another entity if one entity controls the other or the two entities are under common control the “related entity group.”
For this purpose, control is taken as including the direct or indirect ownership of more than 50 percent of the vote and value in an entity.
An entity that is a member of a related entity group will not be a Financial Institution if-
Where a UK Financial Institution has any Related Entities that, as a result of the jurisdictions they operate in, are unable to comply with FATCA, then the UK Financial Institution must treat the related entity as an NPFI and fulfil obligations in respect of that NPFI as set out in Article 4 of the Agreement. Further guidance on these obligations is set out in more detail at Section 9.4.
Exemption for Investment Entities
Investment Entities that have received seed capital from a member of a group to which the Investment Entity belongs will not be considered a Related Entity for the purposes of the Agreement.
In general a seed capital investment is an initial capital contribution (that is intended as a temporary investment), made to an Investment Entity. This will generally be for the purposes of establishing a performance record before selling interests in the entity to unrelated investors, or for purposes otherwise deemed appropriate by the manager.
Specifically, an Investment Entity will not be considered a Related Entity as a result of a contribution of seed capital by a member of the group if: