CTA Saga Comes (Largely) Full Circle: No Longer Applies to Domestic Entities Under New Interim Final Rule

03.27.2025

As previewed by the federal government in early March, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an interim final rule on March 21, 2025 which removes the requirement that U.S. companies and U.S. individuals report beneficial ownership information (BOI) to FinCEN under the federal Corporate Transparency Act (CTA).   Under this interim final rule (which is effective immediately), only foreign companies registered in any U.S. state or Tribal jurisdiction must file a beneficial ownership information report (BOIR), and even then those BOIRs would not need to report information about any U.S. person as a beneficial owner.

Specifically, in the interim final rule FinCEN revised the definition of “reporting company” to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. state or Tribal jurisdiction by the filing of a document with a secretary of state or similar office.  These foreign entities were previously known under CTA regulations as “foreign reporting companies”.   Under this interim final rule, an entity previously defined as a “domestic reporting company” is exempted from the reporting requirements and does not have to report BOI to FinCEN, or update or correct BOI previously reported to FinCEN.

FinCEN’s rationale for exempting domestic companies from BOIR filings centered around the compliance burdens imposed on businesses (particularly small businesses), consistency with the new administration’s position on the federal regulatory framework, and the existence of other anti-money laundering safeguards (namely, existing requirements of certain financial institutions to collect a legal entity’s customer BOI at the time of account opening) that mitigate illicit finance risks.

The issuance of this interim final rule caps a tumultuous six-month period that has seen a series of judicial orders, appeals and government agency announcements that cast uncertainty over the scope and constitutionality of the CTA and the timeframe for compliance by millions of businesses registered in the U.S.

FinCEN is accepting comments on this interim final rule within 60 days after publication in the Federal Register. FinCEN will assess the exemptions, as appropriate, in light of those comments and intends to issue a final rule this year.

https://fincen.gov/news/news-releases/fincen-removes-beneficial-ownership-reporting-requirements-us-companies-and-us