Important Update: U.S. businesses and persons are now exempt from BOI reporting (beneficial ownership information) filing requirements of the Corporate Transparency Act (CTA).
After a roller coaster ride of legal challenges, deadline changes and compliance uncertainty, the Treasury announcement and subsequent FinCen Interim Final rule eliminate BOI reporting compliance concerns for U.S. domestic companies and persons. The new rule will dramatically reduce the number of companies required to report.
Consistent with the U.S. Department of the Treasury’s March 2, 2025 announcement on March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that removes the BOI reporting requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.
In that interim final rule, FinCEN revises the definition of “reporting company” to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also specifically added domestic companies—those entities formed in the U.S.— to the list of exempted entities.
Non-U.S. companies with certain contacts to the U.S., however, will still have to file the BOI report. It is important to note that these companies need not report the beneficial ownership of U.S. equity owners and those U.S. equity owners of foreign companies are no longer required to file a separate report. Foreign reporting companies that only have beneficial owners that are U.S. persons will be exempt from the requirement to report any beneficial owners.
Previously, reporting requirements applied to a broad range of businesses created in the U.S. and foreign companies registered to do business in any U.S. state or Indian tribe.
What this means for you and your business
Through this interim final rule, ALL entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners are exempt from the requirement to report BOI to FinCEN. Any BOI penalties and fines related to prior regulations will not be enforced. In addition, US beneficial owners of foreign entities are exempted from from having to share personal information.
What the Interim Final Rule changes about BOI reporting
- Domestic Companies No Longer Need To Report. Entities formed in the U.S.— corporations, LLCs, and others — are exempt from BOI (Beneficial Ownership Information) reporting requirements. This exemption also extends to any updates or corrections to previously submitted reports.
- U.S. Citizens Exempt From Reporting. Even if a U.S. person is a Beneficial Owner of a foreign company doing business in the U.S., they are not required to report their ownership information. Foreign reporting companies are similarly exempt from reporting the BOI of their U.S. owners.
- Foreign Companies Still Have To Report — But With Limits. Foreign reporting companies must continue filing BOI — but only for non-U.S. persons. If all beneficial owners are U.S. persons, no reporting is required. Additionally, deadlines have been adjusted – see below.
New foreign entity BOI reporting deadlines
- Foreign entities that are reporting companies must file within 30 days of the interim rule’s publication (March 21, 2025) if they were registered before that date.
- Reporting companies registered to do business in the U.S. on or after the rule’s publication have 30 calendar days to file an initial BOI report after they receive notice that their registration is effective.
In summary
The Treasury announcement and subsequent FinCen Interim final rule eliminate BOI compliance concerns for U.S. domestic companies. FinCEN will continue to enforce requirements for foreign reporting companies.
Under the law as written and passed by Congress, approximately 32 million companies were subject to the CTA in 2024, the first year the law was in effect. Now, however, under the most recent application by the Treasury, the number of businesses impacted by the new rule is estimated to be just a fraction of the CTA’s original scope.
Note: The CTA was enacted on Jan. 1, 2021, as part of the broader Anti-Money Laundering Act of 2020. The regulations aimed to increase transparency, aid law enforcement, and combat illicit financial flows. The U.S. is under some international pressure to adopt greater transparency rules for entity ownership to help fight illegal activities. It is possible that Congress may try to find a middle ground by seeking to amend CTA or to force a broader enforcement of the statute in the future. Such an action, however, is unlikely at this time.
Questions?
Contact your W&D advisor at 847-267-9600 or [email protected]. For more information, see https://fincen.gov/news/news-releases/fincen-removes-beneficial-ownership-reporting-requirements-us-companies-and-us.
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