The LEI is swiftly positioning itself as the major business identifier owing to the fact that almost close to 2 million businesses are dependent on the ISO standard for their international and regulatory business requirements.
Initially pushed by regulation, the LEI is now on the tip of getting adopted by businesses across the world concerning more realistic reasons and wider benefits it offers. The LEI is no longer perceived as an additional reporting liability but it is considered as an important asset of the business. It provides a secure environment for undertaking international transactions, shorter KYC methods, and enhances transparency within the international financial system.
Let us now understand more about the reasons why your company needs an LEI number.
1. Simplicity and Accessibility
The barrier for entry to obtaining an LEI is very low. Applying for an LEI is a very simple process that only takes very little time. Any entity which can be considered a legal entity may obtain one. This includes Limited Companies, Funds, Trusts, Charities, Associations, Government Bodies, and Banks and in every country in the World.
Having an LEI is heavily regulated in many parts of the world. If you do business internationally, especially in the EU, US or UK you will most likely be required to have an LEI for reporting purposes.
If you are registered offshore and do business internationally under another name, the LEI offers multiple “doing business as” naming options and can be flexible to meet your particular needs.
You can also list parent company information to create an ownership map of your organizational structure, which includes direct parents, ultimate parents, branches, etc.
Having an LEI Certificate is a very simple and efficient way of showing the world that you are legitimate, open for business, and are a transparent entity with international credibility.
4. Global Approval
The LEI provides the same tool but on a single, standardized global scale. The LEI is standardized, meaning it provides the same company data regardless of the jurisdiction or industry. This improves workflow, KYC processes and consolidates hundreds of national registries into one useful search tool.
National company registries can provide a Certificate of Incorporation or Incumbency which includes a company registration ID. These are often used by companies to prove their existence, however, they are only valid on a national level. The LEI certificate is a more convenient, fit-for-purpose document.
By obtaining an LEI number you are eligible to get an LEI Certificate. The LEI Certificate replaces traditional certificates as it is internationally valid. To provide your regulators, customers, or potential investors Get a Legal Entity Identifier here.
5. Reliable Business Identity
Your overseas customers or potential investors will want to know that you are who you say you are. Having a Legal Entity Identifier is a guaranteed way of proving you are a registered entity and you stand behind your company. This is why the LEI has become such a trusted identifier for many regulators and lawmakers.
Companies having their operations spread internationally have rapidly started applying for LEI in recent times. This makes it easy to conduct business easily on a global scale. The reasons we discussed in this article are also enough to justify the need and importance of having an LEI number for your company.