In line with the US Department of the Treasury’s March 2, 2025, announcement, FinCEN has released an interim final rule that eliminates the requirement for US companies and US persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA).

Foreign companies, however, will still be required to comply with the reporting obligations, ensuring that the US continues to gather critical ownership data on foreign entities registered to do business in the country.

Originally, the CTA mandated that FinCEN gather information on the true owners of US corporations and LLCs and create a database to provide law enforcement, national security officials, and, with consumer consent, financial institutions access to that information when required.

Concealed ownership

The CTA was a bipartisan effort aimed at combating money laundering, terrorist financing, and other illegal activities by addressing the issue of concealed ownership.

For several years, Senators Mark Rubio (R-FL), Ron Wyden (D-OR), and Sheldon Whitehouse (D-RI) spearheaded the CTA, introduced in 2017 to require comprehensive beneficial ownership information, with efforts continuing through 2021 to push for its implementation.

In December 2024, a Texas judge blocked the CTA’s enforcement, but on February 17, 2025, the US District Court for the Eastern District of Texas stayed that nationwide preliminary injunction, allowing the law to be enforced and the collection of beneficial ownership information to proceed.

Earlier this month, while awaiting the interim final rule, FinCEN announced it would not impose fines or penalties for failing to file or update BOI reports under the CTA by the current deadlines.

Interim final rule details

The interim final rule revises the definition of “reporting company” to include only foreign entities registered to do business in the US and formed under the law of a foreign country, exempting domestic entities from BOI reporting requirements. As a result, all US-formed entities and their beneficial owners are no longer required to report BOI to FinCEN.

Foreign companies that meet the new definition and do not qualify for an exemption must report their BOI by updated deadlines but will not need to include US persons as beneficial owners.

FinCEN requires foreign entities registered to do business in the US before the rule’s publication to file BOI reports within 30 days, while those registering after must file within 30 days of receiving notice of their registration’s effectiveness.

Implications and outcomes

As part of its ongoing regulatory process, FinCEN is currently accepting comments on this interim final rule and plans to finalize it later this year. This reflects the US government’s ongoing commitment to reducing regulatory burdens on businesses, particularly small businesses.

As the rule is still under review, compliance teams should continue to monitor developments closely and consider submitting feedback to FinCEN.

Now is an opportune time to raise concerns about the regulatory burdens on small businesses, analyzing which companies could be considered to pose the most significant risks to law enforcement and national security under the CTA, as this could further impact the scope of compliance requirements.