On March 21, 2025, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an interim final rule (IFR) that substantially restricts the scope of the Corporate Transparency Act (CTA). Effective March 26, 2025, this rule exempts all domestic entities and U.S. persons from the requirement to report beneficial ownership information (BOI) to FinCEN.
Key Changes:
- Exemption for Domestic Entities: Entities formed in the United States, previously classified as “domestic reporting companies,” are no longer required to submit BOI reports.
- Foreign Reporting Companies: The CTA’s reporting obligations now apply solely to entities formed under the laws of a foreign country that are registered to do business in any U.S. state or tribal jurisdiction. “Foreign reporting companies” that registered to do business in any State or tribal jurisdiction prior to March 26, 2025, must file initial BOI reports by April 25, 2025. Foreign reporting companies that registered on or after March 26, 2025, must file initial BOI report within 30 days of their registration becoming effective. Foreign reporting companies are exempt from reporting BOI of any U.S. persons who are beneficial owners.
This IFR represents a substantial shift in the implementation of the CTA, with the goal of reducing regulatory burdens on domestic entities and focus reporting requirements on foreign entities operating within the U.S. While the IFR is effective immediately, FinCEN is accepting public comments until May 27, 2025, and intends to issue a final rule later this year.
Entities previously preparing for CTA compliance should reassess their obligations in light of this development. For assistance in understanding how these changes may impact your organization, please contact our firm.
If you have any questions concerning the Corporate Transparency Act, or if you have any other business questions, please contact Angelo Bolcato, Practice Leader, at (973) 729-1880, or via email, abolcato@lcrlaw.com.
