April 2, 2025
On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an Interim Final Rule (IFR) that significantly narrows the scope of the Corporate Transparency Act (CTA) Beneficial Ownership Information (BOI) reporting requirements. Under the IFR, only foreign reporting companies and foreign beneficial owners are now subject to BOI reporting.
This ruling follows recent legal challenges to the CTA’s reporting obligations, including a nationwide preliminary injunction issued by a Texas district court on December 3, 2024, which temporarily paused the enforcement of the CTA’s Reporting Rule.
Key Takeaways
- Exemption For Domestic Entities: U.S. domestic companies—entities formed in the United States—are now exempt from CTA BOI reporting requirements. Domestic entities are no longer classified as “reporting companies” under the CTA. As a result, U.S. domestic companies are no longer required to file initial BOI reports or update/correct previously filed BOI reports with FinCEN.
- Exemption of U.S. Beneficial Owners of Foreign Reporting Companies: Foreign reporting companies—entities formed in a foreign country and registered to do business in the U.S. —are no longer required to report the BOI of any U.S. person who is a beneficial owner. This means only non-U.S. beneficial owners must be disclosed.
- Special Rule for Foreign Pooled Investment Vehicles: Foreign pool investment vehicles are exempt from reporting the BOI of any US person who exercises substantial control over the entity. If no non-U.S. person holds substantial control, the entity is not required to report any beneficial owners.
- Extended Deadlines for Foreign Reporting Companies: Foreign reporting companies that do not qualify for an exemption must file their BOI reports by April 25, 2025. Newly registered foreign reporting companies formed after March 26, 2025, must file their BOI reports within 30 days of their U.S. registration. However, these companies are not required to report their U.S. beneficial owners.
Looking Ahead
FinCEN is currently soliciting public comments on the IFR and intends to issue a final rule later this year. In the meantime, the narrower scope of reporting requirements under the IFR will remain in effect.
We will continue to monitor developments and keep our clients updated on any changes impacting CTA compliance. If you have questions or concerns about CTA related matters, please contact Kathleen Millrood.
The information in this notice is informational in nature and should not be taken as formal legal advice. You should consult an attorney for advice regarding your business’ individual situation.
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Kathleen Millrood is an Associate Attorney at Liff, Walsh & Simmons and a member of the firm’s Real Estate, Business Law, and Commercial Finance practice groups.
If you have questions on this article or another business law matter, our attorneys are here to help. Please contact Liff, Walsh & Simmons for assistance.
