I'm an American that owns an offshore company located in Chile. I plan on opening a cryptocurrency exchange, but wouldn't have any American customers, I'd also block all US IPs as a precautionary matter. A friend of mine has told me repeatedly that I need to comply with the requirements of FATCA. This can't be correct, is it?
The way I understand this law, international businesses only need to comply if they have American customers
https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance_Act#ProvisionsReading the provisions of FATCA, I don't see a way out that exclude because even if you stop US citizens from patronizing your services and block their IPs, the business would need to report you for having a stake in the company which is an asset to you simply because you are a US citizen. In the eyes of the law for a limited liability company, the business and the owner are separate individuals.
Quoting the link above,
...FATCA also requires such persons to self-report their non-U.S. financial assets annually to the Internal Revenue Service (IRS) on form 8938, which is in addition to the older and further redundant requirement to self-report them annually to the Financial Crimes Enforcement Network (FinCEN) on form 114 (also known as 'FBAR').[2] Like U.S. income tax law, FATCA applies to U.S. residents and also to U.S. citizens and green card holders residing in other countries.My advise, start thinking of doing it right from the beginning and if you cannot avoid complying, then there is nothing wrong in opening up you business for US citizens but if you know you can handle yourself alone, you can still go ahead with the planned exclusion.