What FinCEN’s Elimination of the BOI Reporting Requirement Means for U.S. Entities
On March 2, 2025, the U.S. Department of the Treasury announced important changes to the Corporate Transparency Act (CTA). These changes were followed by an interim final rule from the Financial Crimes Enforcement Network (FinCEN) on March 26, 2025. The new rule removes the requirement for U.S. entities and U.S. persons to report beneficial ownership information (BOI) under the CTA.
Key Changes in the BOI Reporting Requirement
- New Definition of Reporting Company: The new rule defines “reporting company” as only foreign entities that have registered to do business in the United States. Domestic entities are no longer required to report BOI. Previously, both domestic and foreign entities were subject to reporting requirements.
- U.S. Entities Exempt from BOI Reporting: U.S. entities are now exempt from submitting BOI. This includes companies that were previously classified as “domestic reporting companies.”
- Foreign Entities Still Required to Report BOI: Foreign entities that have registered to do business in the U.S. must still report their BOI. However, they do not need to disclose U.S. persons as beneficial owners.
Foreign Entity Filing Deadlines
- Foreign Entities Registered Before March 26, 2025: These entities must file their BOI by April 25, 2025.
- Foreign Entities Registered on or After March 26, 2025: These entities must file their BOI within 30 days after receiving notice of their registration in the U.S.
Impact of the New Rule on U.S. and Foreign Businesses
- Exemption for U.S. Businesses: The new rule eliminates BOI reporting requirements for U.S.-based companies, easing compliance obligations for domestic businesses.
- Continued Compliance for Foreign Companies: Foreign businesses operating in the U.S. still need to comply with BOI reporting requirements, even though they do not need to disclose U.S. persons as beneficial owners.
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The information provided herein is not intended to provide legal advice to the reader. For further details or questions regarding the CTA and its applicability to your business, please reach out to us via email at [email protected].
