In a significant development for corporate compliance, the Financial Crimes Enforcement Network (FinCEN) has issued an interim final rule that fundamentally alters the Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA). This regulatory shift represents a substantial change in the compliance landscape for U.S. businesses and their stakeholders.
The interim final rule, consistent with the Department of Treasury’s March 2, 2025, announcement, implements several modifications to the reporting framework. Most notably, FinCEN has removed the obligation for U.S. companies and U.S. persons to report beneficial ownership information. All entities created in the United States—previously classified as “domestic reporting companies”—are now exempt from BOI reporting requirements.
Furthermore, FinCEN has revised the regulatory definition of “reporting company” to apply exclusively to entities formed under foreign law that have registered to do business in any U.S. State or Tribal jurisdiction through a filing with a secretary of state or similar office. This represents a fundamental narrowing of the scope of entities subject to these requirements. This is different than a foreign entity that establishes a United States subsidiary which would be exempt under the interim final rule.
These foreign entities meeting the new “reporting company” definition must still report BOI to FinCEN, albeit with significant changes. They are not required to report any U.S. persons as beneficial owners, and U.S. persons are not required to report BOI with respect to any foreign entity for which they are a beneficial owner. This creates a more targeted reporting regime focused specifically on foreign entities operating within U.S. jurisdictions.
The interim final rule establishes revised reporting deadlines for foreign entities. Foreign reporting companies registered to do business in the United States before the publication date of the interim final rule must file BOI reports within 30 days of that date (March 26, 2025). Those registered on or after the publication date have 30 calendar days from receiving notice of effective registration to file their initial BOI report. These accelerated timelines underscore the importance of prompt compliance for affected foreign entities.
Of particular relevance to compliance concerns, FinCEN has indicated it will not enforce beneficial ownership reporting penalties or fines against U.S. citizens, domestic reporting companies, or their beneficial owners.
This regulatory pivot significantly reduces compliance burdens for U.S. entities and their beneficial owners who were previously preparing for extensive reporting requirements. However, foreign entities doing business in the United States must remain vigilant about their ongoing obligations. The change appears to reflect a recalibration of the regulatory approach to beneficial ownership transparency, focusing compliance efforts on foreign entities while exempting domestic organizations.
The Dawda team recommends that foreign entity clients review and confirm reporting obligations under the new rule, particularly the accelerated 30-day filing requirement. While domestic entities are now exempt from reporting, maintaining beneficial ownership documentation remains a best practice for corporate governance and prudent in case of future regulatory changes. All clients should continue to monitor FinCEN for additional guidance regarding implementation details and potential further modifications.
Our Corporate Compliance team continues to closely track these regulatory developments and stands ready to assist clients in navigating these changes. For specific questions about how these changes affect your organization, please contact your Dawda attorney.
