By attorneys Conner Wasson and Rachel Fritz
On March 21, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an interim rule that narrows the scope of the Corporate Transparency Act (“CTA”).
Under the interim rule, the definition of a “reporting company” is now limited to any entity that: (i) is formed under the laws of a foreign country, and (ii) is registered to do business with a state or tribal jurisdiction of the United States. Domestic entities, formed under the laws of a state or tribal jurisdiction, are now explicitly exempt from the CTA’s reporting requirements, thereby significantly reducing the scope of entities that must comply with the CTA’s beneficial ownership reporting mandates.
Additionally, the definition of “beneficial owner” has been refined to exclude “United States persons,” which includes U.S. citizens and lawful permanent residents. As a result, foreign companies that are required to report under the CTA will no longer need to disclose beneficial ownership information (“BOI”) for owners who qualify as United States persons.
For foreign companies that are required to file BOI reports, FinCEN has extended the deadline to file initial BOI reports or to update or correct previously filed reports. The deadline is now 30 days after the publication of the final interim rule or 30 days after their registration to do business in the United States, whichever is later.
FinCEN also plans to solicit public comments on the interim rule and will assess whether the exemption for domestic reporting companies and their beneficial owners should remain in place. A final rule is expected later this year, after FinCEN considers the feedback received.
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