The Corporate Transparency Act (CTA) has undergone a significant shift. The FinCEN recently issued a new Interim Final Rule (IFR), dramatically narrowing the law's reach. As a result, most U.S. companies no longer have Beneficial Ownership Information (BOI) reporting obligations.
In this Insights post, we provide a breakdown of the IFR’s key provisions and what they mean for your business.
Key Takeaways from the Interim Final Rule
1. Domestic Companies Are Now Exempt
FinCEN has exempted domestic reporting companies—and their beneficial owners—from BOI reporting requirements. A domestic reporting company includes any corporation, LLC or similar entity created by filing formation documents with a state or tribal authority.
This exemption removes the primary compliance burden the CTA previously imposed on most U.S.-based businesses.
2. Relief for U.S. Persons Involved with Foreign Companies
The IFR also exempts foreign reporting companies from reporting the BOI of U.S. persons.
U.S. individuals who are beneficial owners of foreign reporting companies are no longer required to submit their BOI to FinCEN.
A foreign entity is a corporation, limited liability company, or other legal entity formed under the law of a foreign country and registered to do business in the United States by filing a document with a U.S. state or tribal authority. This is a significant rollback for multinational business owners and investors concerned about dual-reporting obligations.
3. BOI Reporting Still Required for Foreign Entities with Non-U.S. Beneficial Owners
Foreign reporting companies must still report BOI to FinCEN if their beneficial owners are not U.S. persons.
If a foreign business has non-U.S. individuals as beneficial owners and is registered to operate in the U.S., it still falls under the BOI reporting requirements.
4. Extended Filing Deadline for Foreign Entities
FinCEN has extended the deadline for affected foreign companies. Initial BOI reports or updates/corrections to prior filings are now due 30 days after the IFR is published—or 30 days after the company registers to do business in the U.S., whichever comes later.
What This Means for Your Business
- Domestic companies and their beneficial owners are no longer required to file BOI reports.
- U.S. individuals involved in foreign entities are also exempt from reporting.
Only foreign entities with non-U.S. beneficial owners must still comply. It's also questionable, given this requirement, if you want to register a foreign entity in the U.S.
Companies should continue to monitor FinCEN’s next steps. The agency has invited public comments and intends to issue a final rule later this year.
