Compliance (CRS, FATCA, AML)

Who this is for / not for

This guide is for anyone who wants a plain-language overview of why banks and service providers ask about tax residence, beneficial owners, and source of funds — and what CRS, FATCA, and AML mean in practice. It is not legal or tax advice.

Decision summary

  • CRS and FATCA are automatic exchange-of-information regimes: jurisdictions share financial account data with tax authorities.
  • AML (anti–money laundering) requires banks to know their customer, verify identity, and understand source of funds.
  • Banks ask for this information because they are legally required to; providing it accurately supports a smooth onboarding and ongoing relationship.

Banking & payments reality

Banks must comply with CRS/FATCA and AML rules. That is why they collect tax residency, beneficial ownership, and source-of-funds information. Incomplete or inconsistent answers delay or block onboarding. Payment processors have similar compliance requirements. See Bank account opening checklist for what to prepare.

Costs & timeline

Compliance itself does not add a fixed cost to setup; delays from incomplete or incorrect disclosures can extend timelines. See Costs, timelines, hidden fees for typical stages.

Docs & KYC checklist

Banks typically ask: tax residency (and sometimes citizenship); beneficial owners and controllers; purpose of account; expected activity and source of funds. They may request self-certification forms (e.g. CRS/FATCA) and supporting documents. See Bank account opening checklist and Bankability checklist.

Ongoing obligations

Ongoing: keep tax and beneficial-ownership information up to date; respond to periodic reviews; report material changes. Failure to update can lead to account restriction or closure. See jurisdiction pages for local filing and reporting.

Common failure points / red flags

Common issues: incorrect or outdated tax residency; undisclosed beneficial owners; inconsistent source-of-funds story; refusing to complete CRS/FATCA forms. These trigger delays or rejection. See Red flags & scams for due diligence when choosing providers.

Alternatives

There are no alternatives to compliance where you have an account; the obligations follow the account. Choosing a jurisdiction or structure does not remove CRS/FATCA/AML; it only changes which rules apply. See Compare jurisdictions for context.

FAQ

What is CRS?
Common Reporting Standard: an international framework where jurisdictions automatically exchange information about financial accounts held by tax residents of other participating countries. Banks collect and report; you complete self-certification forms.
What is FATCA?
US law requiring foreign financial institutions to report accounts held by US persons (citizens or residents). Banks ask about US status and may require IRS forms (e.g. W-9, W-8BEN).
What is AML?
Anti–money laundering: rules that require banks to verify identity (KYC), understand the purpose and nature of the business, and assess source of funds. It is why banks ask for narrative and documentation.
Will my data be shared?
Under CRS/FATCA, account information is reported to tax authorities in the relevant jurisdiction(s), which may then exchange it under treaties. This is automatic and legally required; it is not optional for the bank.
What if I have multiple tax residencies?
Declare all relevant tax residencies on the forms the bank provides. Inconsistent declarations can cause problems. If unsure, get professional advice.

Next steps