On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule under the Corporate Transparency Act. The revised rule changes the definition of “reporting company” to mean any entity that is (1) a corporation, limited liability company, or other entity; (2) formed under the law of a foreign country; and (3) registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of that state or tribe. In addition, the revised rule creates a new exemption for any entity that is (1) a corporation, limited liability company, or other entity; and (2) created by the filing of a document with a secretary of state or any similar office under the law of a U.S. state or Indian tribe. Further, a “reporting company” is not required to report the beneficial ownership information of any United States persons who are beneficial owners.
The effect of the new rule is to limit the reporting requirement to entities formed under the law of a foreign country. Entities formed under the law of U.S. state or tribe are exempt. U.S. persons who are beneficial owners of a foreign entity are not required to report their ownership interests.
Foreign reporting companies will have 30 days from the date the interim final rule is published in the Federal Register, or 30 days after their registration to do business in the U.S. (whichever is later) to file initial reports and to update or correct previously filed reports.
FinCEN is accepting comments on the interim final rule and intends to issue a final rule later this year.
What does this mean for reporting companies?
Entities formed under the law of U.S. state or tribal jurisdiction are exempt from beneficial ownership reporting requirements. Newly formed U.S. entities do not need to file reports. Existing U.S. entities that had not previously filed reports do not need to do so. Foreign entities, both existing and newly formed, that are registered to do business in the U.S. should prepare and file reports with FinCEN and keep them updated for any changes. However, foreign entities do not have to report the ownership information of their beneficial owners that are U.S. persons, and U.S. persons are not required to provide such ownership information with respect to their interests in foreign entities.
