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FBAR financial interest through companies and entities

Updated

Short answer

A foreign account held in a company's or trust's name can belong on your FBAR. You have a financial interest in it if you own more than 50% of the entity under the tests below, if an agent or nominee holds the account for you, or if certain trust tests are met.⁠Source 1⁠Source 3

This is separate from signature or other authority, which is the power to move the account's assets by instructing the institution directly. Check both.⁠Source 1⁠Source 2

Direct, nominee and indirect interests

Owning a foreign account in your own name is the simple case. You also have a financial interest when an agent, nominee, attorney or other representative holds an account on your behalf, or when you own enough of an entity or trust that holds the account.⁠Source 3

The ownership tests

Under 31 CFR 1010.350(e), you have a financial interest in a foreign account held by any of the following. Check the tests against the organizational chart, governing agreements and ownership records for the reporting year.⁠Source 3

  • A corporation in which you own, directly or indirectly, more than 50% of the voting power or of the total value of the shares.⁠Source 3
  • A partnership in which you own more than 50% of the interest in profits or capital.⁠Source 3
  • Any other entity, apart from a trust, in which you own more than 50% of the voting power, of the total value of the equity interest or assets, or of the interest in profits.⁠Source 3
  • A trust of which you are the grantor and have an ownership interest under the U.S. grantor trust rules (26 U.S.C. 671–679).⁠Source 3
  • A trust in which you have a present beneficial interest in more than 50% of the assets, or from which you receive more than 50% of the current income.⁠Source 3

Special rules and how to report

Report the account's full maximum value, not your ownership share.⁠Source 1⁠Source 3

A trust beneficiary who meets the 50% test doesn't need to report the trust's accounts if the trust, its trustee or its agent is a U.S. person that files an FBAR disclosing them.⁠Source 3

Anyone who causes an entity to be created for a purpose of evading the FBAR rules has a financial interest in that entity's accounts.⁠Source 3

An entity formed in the United States files its own FBAR when it meets the filing test. A single-member LLC that is disregarded for income tax still files its own FBAR.⁠Source 4

When to obtain specialist review

Trusts, nominee arrangements and multi-tier ownership can give more than one U.S. person a reporting obligation for the same account. If the ownership records don't clearly show whether a test is met, get professional advice.⁠Source 1⁠Source 3

Related questions

If the bank account is in a foreign company's name, can I ignore it?

No. If you own more than 50% of the company, you have a financial interest in its accounts and must report them.⁠Source 1⁠Source 3

Is being a director the same as holding a financial interest?

No. A director has a financial interest only through ownership, such as owning more than 50% of the company. If a director can move the company's money by instructing the bank, that is signature authority, which is a separate test.⁠Source 2⁠Source 3

Do I report a foreign company bank account if I own the company?

Yes, if you own more than 50% of the voting power or the value of its shares and your foreign accounts together exceed $10,000. Report each of the company's foreign accounts at its full maximum value.⁠Source 1⁠Source 3

Is a foreign trust bank account always mine for FBAR?

No. You have a financial interest in a trust's foreign accounts if you are the grantor with an ownership interest under the grantor trust rules, or if you have a present beneficial interest in more than 50% of its assets or income.⁠Source 3

What if a nominee or agent holds an account for me?

An account held by an agent or nominee on your behalf gives you a financial interest even though someone else holds legal title.⁠Source 3

Should I report the company's account or my ownership percentage?

Report the account's full maximum value, not your ownership share.⁠Source 1⁠Source 3

Can my company and I both have FBAR obligations?

Yes. A U.S. entity and a U.S. person with an interest in or authority over its accounts can have separate obligations. A filing by one doesn't automatically cover the other.⁠Source 1⁠Source 2⁠Source 4

Which ownership documents are useful for FBAR analysis?

A current corporate ownership chart, account titles, shareholder records, trust or partnership agreements and bank signature mandates help establish the relevant relationship.⁠Source 1⁠Source 2

Do I need a tax adviser for layered foreign holding companies?

Layered ownership and trusts can have complex financial-interest tests; obtain professional advice if documentation does not clearly establish the filing result.⁠Source 1⁠Source 2

Next pages

Sources

Official sources used for this page.

  1. Source 1: IRS, IRM 4.26.16 — Report of Foreign Bank and Financial Accounts (opens in a new tab)

    Financial-interest rules involving nominees, entities and beneficial interests; full account value reported.

    irs.govChecked Source updated Back to text

  2. Source 2: IRS, Report of Foreign Bank and Financial Accounts (FBAR) (opens in a new tab)

    Who must report foreign accounts and the difference between financial interest and authority.

    irs.govChecked Back to text

  3. Source 3: eCFR, 31 CFR § 1010.350 — Reports of foreign financial accounts (opens in a new tab)

    31 CFR 1010.350(e) ownership tests for corporations, partnerships, other entities and trusts, the anti-avoidance rule and the trust-beneficiary exception in (g)(5).

    ecfr.govChecked Back to text

  4. Source 4: FinCEN, Who Is A United States Person? (opens in a new tab)

    An entity disregarded for income tax purposes must still file an FBAR if otherwise required.

    fincen.govChecked Back to text

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