New Beneficial Ownership Information Reporting Requirement for Puerto Rico Financial Institutions

Introduction

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, has issued a final rule requiring financial institutions in Puerto Rico to report beneficial ownership information by January 1, 2024. This new requirement is an anti-money laundering initiative aimed at combating financial crimes and terrorism.

What is Beneficial Ownership?

Beneficial ownership refers to an individual who exercises substantial control over the entity or owns at least 25% of its ownership interests. Company applicants are individuals who directly file the document creating or registering the company, or those primarily responsible for directing or controlling the filing process.

Reporting Requirements

The Beneficial Ownership Information (BOI) report will require disclosure of the entity’s basic information, as well as that of its beneficial owners and company applicants. The report must include:

• Entity’s full legal name
• Trade names and dbas
• Current address
• Jurisdiction of formation
• Employer identification number (EIN)
• Taxpayer identification number (TIN) or foreign identification number, if applicable
• For beneficial owners:
  • Full legal name
  • Date of birth
  • Current residential address
  • Unique identification number from an acceptable identification document
  • Name of the issuing state or jurisdiction

Compliance Deadline

Puerto Rico financial institutions must comply with the new requirement by January 1, 2024, unless they are exempt. Exemptions apply to publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.

The deadline for reporting beneficial ownership information is as follows:

• Entities created or registered before January 1, 2024, will have until January 1, 2025, to file their initial report
• Those created or registered on or after January 1, 2024, will have 30 days to file the report

Next Steps

Puerto Rico financial institutions must take immediate action to ensure compliance with the new requirement. RSM Puerto Rico is available to provide guidance and support in this matter.

For more information, contact our tax advisors at (787) 751-6164 or [email protected].