CTA March 21, 2025 Update: FinCEN Removes Beneficial Ownership Reporting Requirements for Domestic Entities and Sets New Deadlines for Foreign Entities

2025-03-28 11:56:05

On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule exempting U.S domestic entities from beneficial ownership information reporting (BOIR) requirements under the Corporate Transparency Act (CTA). The interim final rule narrows the scope of the CTA such that only entities formerly known as foreign reporting companies must comply with BOI reporting obligations.

Background: CTA Enactment

The CTA was enacted in 2021 to combat illicit financial activities including money laundering and other financial crimes. It requires reporting companies to disclose information about their beneficial owners to FinCEN. A “reporting company” under the CTA is defined as:

• A “domestic reporting company”: a corporation, limited liability company (LLC), or other similar entity created by filing a document with a secretary of state or similar office in the US; or

• A “foreign reporting company”: a corporation, LLC, or other similar entity created under the law of a foreign country but registered to do business in the US by filing of a document with the secretary of state or similar office.

Substantive Changes Imposed by the Interim Final Rule

The interim final rule states that the term “reporting company” includes only entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCen justified this change by reasoning that collecting BOI from domestic entities imposed a burden on legitimate businesses, and would not be highly useful in combating illicit financial activities.

New Reporting Deadlines

The interim final rule is scheduled to be published in the Federal Register on March 26, 2025. Based on the date of publication, reporting companies will be subject to the following deadlines:

• Reporting companies registered to do business before the date of publication must file BOI reports no later than 30 days from that date

• Reporting companies registered to do business in the United States on or after the date of publication have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.