U.S. Companies and Individuals Now Exempt From Reporting Requirements
The U.S. Treasury Department has significantly scaled back the reach of the Corporate Transparency Act (CTA).
Under a new interim final rule released by Financial Crimes Enforcement Network (FinCEN), U.S.-formed companies are now exempt from reporting or updating beneficial ownership information (BOI) to FinCEN. The rule now applies only to foreign entities registered to do business in the United States. Even for these non-U.S. entities, the beneficial ownership of U.S. persons is not required to be reported.
The interim rule redefines “reporting company” to include only entities formed under the laws of a foreign country that have registered to do business in a U.S. state or tribal jurisdiction. These foreign entities must still comply with BOI reporting requirements—under newly extended deadlines. The new rule does not require a U.S. company that is a subsidiary of a foreign entity to report under the CTA.
What’s Changed:
- Domestic companies are now exempt.
That means corporations, LLCs and other entities created in the United States no longer need to file BOI reports, update them, or correct previous filings.
- U.S. individuals are off the hook.
U.S. persons who are beneficial owners of foreign entities don’t need to provide their BOI, and foreign entities don’t need to report BOI for any U.S. person.
- Foreign companies still report—but only non-U.S. beneficial owners.
If all beneficial owners of a foreign reporting company are U.S. persons, the entity doesn’t need to file a BOI report at all.
- Foreign pooled investment vehicles are also exempt from reporting U.S. persons who exercise substantial control.
New Reporting Deadlines for Foreign Entities:
- Foreign entities registered before the rule’s publication must file within 30 days of the publication date.
- Those registered on or after that date must file within 30 days of receiving effective notice of registration.
The interim rule follows recent litigation that paused implementation of the CTA and a March 2025 Executive Order directing agencies to reduce regulatory burdens. Treasury now estimates this rollback could save companies nearly $9 billion annually in compliance costs.
The estimated number of foreign companies that will be required to report is 11,667 companies. In 2022, when the initial CTA regulations were announced, FinCEN had estimated that more than 32 million existing companies would be subject to beneficial ownership reporting requirements and that an additional 5 million would become subject to the requirements each year after 2024.
What’s Next:
FinCEN is accepting public comments for 60 days, but this rule is final without prior notice and public comment. After the public comment period, FinCEN will issue a final rule later this year. Thus, the final rule will be issued during the two-year period during which the agency has the discretion to extend filing deadlines.
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