On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”) announced the issuance of an interim final rule that significantly changes the reporting requirements for beneficial ownership information (“BOI”) under the Corporate Transparency Act (“CTA”).
Here are the key takeaways:
1. Removal of BOI Reporting Requirement for U.S. Companies and Persons:
- FinCEN has removed the requirement for U.S. companies and U.S. persons to report BOI.
- Entities created or formed under U.S. law, previously known as “domestic reporting companies,” are now exempt from BOI reporting.
2. New Definition of “Reporting Company”:
- The revised definition of “reporting company” now only includes entities that are formed under the law of a foreign country and have registered to do business in any U.S. state or Tribal jurisdiction by filing a document with a secretary of state or similar office (formerly known as “foreign reporting companies”).
- Foreign entities meeting this definition and not qualifying for an exemption must still report their BOI.
- Foreign reporting companies are not required to report any U.S. persons as beneficial owners.
3. Reporting Deadlines for Foreign Entities:
- Foreign reporting companies registered before March 21, 2025, must file BOI reports no later than April 20, 2025 (30 days from the date of the interim final rule).
- Foreign reporting companies registered on or after March 21, 2025, must file an initial BOI report within 30 calendar days after receiving notice that their registration is effective.
4. Exemptions and Non-Enforcement Policy:
- FinCEN has stated that it will not enforce penalties or fines against U.S. citizens, domestic reporting companies, or their beneficial owners concerning BOI reporting.
As always, if you have any questions regarding the above update, please contact your SAX Advisor.