On March 21, 2025, the Financial Crimes and Enforcement Network (FinCEN) issued an interim final rule that drastically changes the reporting requirements under the Corporate Transparency Act (CTA).
Notably, the interim final rule eliminated all reporting requirements for both U.S. entities and U.S. individuals. As of now, the CTA’s reporting requirements only apply to foreign entities which have registered to do business in the U.S. However, even such foreign entities are not required to report any beneficial owner information for U.S. individuals who may otherwise qualify as a beneficial owner of the entity.
This interim final rule essentially guts the CTA’s scope (and purpose), as its original form was estimated to apply to more than 32 million entities. Now, this number is estimated to be around 10,000 to 100,000 entities. Foreign entities that qualify as a reporting company under the interim final rule will have thirty (30) days from the date the interim final rule is published in the Federal Register to comply with the CTA’s reporting requirements. As of the date of this update, the interim final rule has not been published in the Federal Register.
As the name suggests, this interim final rule is still subject to change. A sixty (60) day public comment period will be open for FinCEN and the Department of Treasury to review, answer and further change the rule based on these comments. Additionally, legal challenges may continue to pop up which could further affect these changes. The broader legal community is also speculating an increase in state-level participation around related disclosure requirements. States like New York, Massachusetts, and California have either enacted or proposed CTA-related laws.
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