Identifying an offshore investor

FPIs incorporated under different structures in different jurisdictions create regulatory loopholes and make it difficult to identify the true beneficiary of foreign investing entities

For obvious reasons, identifying the actual beneficiary of an investment in an asset is extremely important for law enforcement agencies across the world.
 

In India, the Prevention of Money Laundering Act, 2002, defines “beneficial owner” to mean an individual who ultimately owns or controls a client of a reporting entity, or the person on whose behalf a transaction is being conducted, and includes a person who exercises ultimate effective control over a juridical person.

The Prevention of Money-laundering (Maintenance of Records) Rules, 2005, prescribe the procedure for maintaining the identity records of clients of banking companies, financial institutions and intermediaries. This