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Regarding, FATCA compliance for a new small business in Japan owned by a US citizen, I read parts of the related IRS website but still have basic questions. http://www.irs.gov/Businesses/Corporations/Information-for-Foreign-Financial-Institutions

  • Q: Do I, the company, or both of us need to register?
  • Q: Do I, the company, or both of us qualify for an exemption? I haven't found clear information online about exemption criteria.
  • Q: If registration is needed, what forms must be filled out?
  • Q: If reporting is required, what forms must be filled out?
  • I'm sure the company needs to file FBAR

Background information:

  • I am a US citizen who has been living abroad in Japan for 4+ years.
  • This summer I started a privately held stock corporation in Japan.
  • I am the only owner.
  • The company only exists in Japan and only has bank accounts in Japan.
  • I will open a corporate bank account in Japan and fund it with 5,000,000 Japanese yen from my personal bank account in Japan.
  • I am the only full time employee.
  • The business will, in the future, make and sell smartphone applications for iPhone and Android. These apps will be sold in various countries.
  • I will receive a monthly salary and will pay taxes on it to Japan.
  • I qualify for the foreign earned income exclusion.
  • I've been filing FBAR forms each year for my personal Japanese bank account.
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  • If your company is not a financial institution, and it doesn't sound like it is, then the page about FATCA to which you linked does not apply to it.
    – Mike Scott
    Sep 5, 2014 at 12:07
  • Thanks Mike. You're right. It's not a bank. I wasn't sure if FFI (Foreign Financial Institution) was a different way of saying foreign company.
    – user1053404
    Sep 5, 2014 at 12:10

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Unless you started a bank or other kind of a financial institution (brokerage, merchant processor, etc etc), the page you linked to is irrelevant.

That said, there's enough in the US tax code for you to reconsider your decision of not living in the US, or at least of being a shareholder of a foreign company. Your compliance costs are going to go through the roof.

If you haven't broken any US tax laws yet (which is very unlikely), you may renounce your citizenship and save yourself a lot of money and trouble. But in the more likely case of you already being a criminal with regards the US tax law, you should probably get a proper tax advice from a US-licensed CPA/EA who's also proficient in the Japanese-American tax treaty and expats' compliance issues resolution.

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