“There’s a big difference between mostly dead and all dead. Mostly dead is slightly alive.”
-Miracle Max from the Princess Bride
However inconceivable you might think this may be, on March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury issued the interim final rule (Interim Rule) for the Corporate Transparency Act (CTA) which removed the requirements for U.S. companies and U.S. persons to report beneficial ownership information (BOI).
While the Interim Rule has eliminated the reporting requirements for most of the entities and persons who were required to file a BOI report under the CTA, it has not completely eliminated the filing requirements for all entities and persons.
More specifically, the Interim Rule provides:
- Any entities created in the U.S. and their beneficial owners (even beneficial owners who are a foreign entity or person) will be exempt from the BOI reporting requirements and will not be required to file or update any BOI reports.
- Foreign entities that meet the definition of a “reporting company” and do not qualify for an exemption (which is outside the scope of this article) must still comply with the BOI reporting requirements (although any U.S. persons who are its beneficial owners are not required to comply with the reporting requirements). A foreign entity is an entity that is formed under the laws of a foreign country and has registered to do business in any U.S. state or tribal jurisdiction by the filing of a registration document with a Secretary of State or similar office.
- Foreign reporting companies that have registered to do business in the U.S. before the date of publication of the Interim Rule in the Federal Register will be required to file their BOI reports no later than 30 days after the publication date of the Interim Rule.
- Foreign reporting companies that register to do business in the U.S. on or after the date of publication of the Interim Rule in the Federal Register will be required to file their BOI reports within 30 days after receiving notice that their registration is effective.
- Foreign entities that are wholly owned by U.S. persons do not have to comply with the BOI reporting requirement.
- A “U.S. person” includes U.S. citizens as well as permanent residents and persons who meet the substantial presence test under the Internal Revenue Code (IRC). This means the exemptions for U.S. persons also apply to foreign nationals who fall under the IRC’s definition of a “United States person” (the term “U.S. person” and “United States person” are used interchangeably by FinCEN).
- S. persons are still required to comply with the BOI reporting requirements if they are the company applicant for the foreign reporting company. A company applicant is a person who directly files, and who is primarily responsible for, or controls or directs, the filing of the foreign reporting company’s registration documents with a Secretary of State or similar office.
FinCEN confirmed it is applying all exemptions and deadline extensions in the Interim Rule in advance of formal publication in the Federal Register and will also not enforce any beneficial ownership reporting penalties or fines against U.S. companies or their beneficial owners.
Although the Interim Rule becomes effective upon being published in the Federal Register, FinCEN will be accepting comments to the Interim Rule for 60 days following the date of its publication and intends to issue a final rule later this year. It should also be noted that there still remain several legal challenges to the BOI reporting requirements and legislation has been introduced in Congress to repeal the CTA. Accordingly, potentially affected entities and persons should continue to closely monitor ongoing developments concerning the CTA as FinCEN prepares its final rule.
FBFK Law will continue to follow the developments relating to the CTA and keep you posted with any further updates.
