by Foodman CPAs & Advisors
As global tax transparency standards evolve, financial institutions across Latan America (LATAM) are facing rising expectations, particularly in how they manage cross-border structuring, beneficial ownership disclosure, and digital asset reporting.
The latest OECD compliance updates signal a strategic shift: tax transparency is no longer a matter of passive reporting. It now requires proactive, real-time alignment with international standards, especially for institutions serving high-net-worth individuals, family offices, and cross-border entities.
What’s Changing: A Shift Toward Real-Time, Global Visibility
The OECD’s evolving frameworks, including the Crypto-Asset Reporting Framework (CARF), DAC7/DAC8, and expended CRS and FATCA guidelines are accelerating the move from static information exchange to dynamic, multi-jurisdictional oversight.
LATAM Financial Institutions must be prepared to:
- Track and document ultimate beneficial ownership (UBO)
- Verify tax residency and economic substance
- Comply with crypto asset reporting obligations
- Monitor cross-border financial flows for audit readiness
Institutions already aligned with a baseline should now assess whether their systems and teams are equipped to support deepertransparency and global interoperability.
Transparency as a Strategic Asset
Cross-border structuring remains a legitimate tool for asset protection, succession planning, and jurisdictional diversification. What’s changing is the expectation of visibility, not just into what the structure is, but how and why it exists.
Today, transparency enables strategy. The institutions best positioned for 2025 are those that view tax compliance as driver of:
- Client trust
- Operational continuity
- Regulatory alignment with global partners
Clients are increasingly seeking advisors who can navigate complexity without compromising their objectives. This is especially true as cross-border tax risk becomes a business continuity issue.
Why LATAM Institutions Are Under the Microscope
LATAM jurisdictions are playing a growing role in the global tax ecosystem. With more countries joining the OECD’s Global Forum on Transparency and Exchange of Information, local governments are enacting legislation aligned with international reporting standards and increasing participation in automatic exchange of information (AEOI) programs.
For financial institutions, this means:
- More frequent and detailed reporting requests
- Heightened due diligence expectations
- Pressure from international correspondent banks to demonstrate compliance.
In short, regulatory alignment is now a precondition for global market access.
Closing the Compliance Gap: Cross-Function Coordination
One of the biggest weaknesses revealed in recent reviews is the lack of internal integration between tax, compliance, and relationship teams. This leads to fragmented views of client structure, especially when:
- Advisors operate independently of internal reporting systems
- Structures are legacy-based and not fully documented
- Relationship managers are siloed from compliance teams
Actionable next steps include:
- Establishing shared views of client structuring risk
- Holding cross-functional reviews between tax, legal, and compliance
- Creating policies for identifying and documenting sensitive arrangements
Better coordination doesn’t just mitigate risk. It improves efficiency and enhances client trust.
2025 Readiness: Practical Steps for LATAM Institutions
The next 12–18 months present a key opportunity to future-proof compliance frameworks. Institutions should:
- Inventory client structures with trusts, crypto exposure, or offshore entities
- Map regulatory intersections between OECD, FATCA, CRS, DAC8, and local laws
- Review documentation for substance, UBO, and tax residency gaps
- Upskill teams on CARF, DAC8, and digital assets reporting
- Support voluntary disclosures to regularize legacy structures
The goal isn’t just box-checking, it’s building compliance infrastructure that supports growth, governance, and trust.
Is Your Strategy Ready?
Tax transparency is no longer optional. It’s a strategic business imperative. Institutions that act now can better serve sophisticated clients, meet international expectations, and remain competitive in an increasingly scrutinized landscape.
At Foodman CPAs & Advisors, we specialize in helping financial institutions and cross-border clients build audit-ready structures that stand up to regulatory scrutiny. From diagnostic reviews to policy development and support on voluntary disclosures, our Complex Tax Team is here to help. What’s your strategy for 2025? Let’s build it together.
