On March 1, 2025, the U.S. Department of the Treasury announced that it will not enforce the Corporate Transparency Act (CTA) against U.S. citizens or domestic reporting companies or their beneficial owners. Treasury also indicated that it will engage in additional rulemaking to narrow the scope of the CTA to foreign reporting companies only.
What You Need to Know
- No Enforcement for U.S. Citizens, Domestic Reporting Companies or their Beneficial Owners – Treasury has confirmed that it will not enforce CTA reporting requirements against U.S.-based entities or individuals at this time. This includes suspending penalties for non-compliance.
- Ongoing Rulemaking to Narrow the CTA – Treasury will begin a formal rulemaking process to limit the scope of the CTA, focusing solely on foreign entities who are registered to conduct business in the U.S.
- Foreign-Owned Entities Still Subject to Reporting – While enforcement is paused for U.S. companies and citizens, Treasury has not clarified whether it will continue enforcing CTA requirements on foreign reporting companies.
- Existing Filings Remain Valid, but Future Deadlines Uncertain – Businesses that have already filed CTA reports do not need to take action, but pending deadlines for new and existing entities may be revised or eliminated.
- Further Guidance Expected – The Financial Crimes Enforcement Network (FinCEN) is expected to issue additional guidance in the coming weeks clarifying compliance obligations.
What This Means for Businesses
For now, U.S. companies and their beneficial owners are not required to comply with CTA reporting obligations, and enforcement risks have been removed. However, businesses should remain vigilant as Treasury undertakes new rulemaking, which could introduce revised reporting requirements in the future.
Next Steps
- Monitor regulatory developments – We are closely tracking Treasury's next steps, including any proposed changes to the CTA.
- Pause new CTA filings – Unless Treasury reverses course, newly formed entities are not required to submit beneficial ownership reports at this time.
- Review your compliance strategy – Businesses should assess whether they need to update internal compliance policies in anticipation of revised rules.
We will provide updates as more details emerge.
