On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule removing the requirement for U.S. companies and persons to report beneficial ownership information (BOI) under the Corporate Transparency Act.
In its interim final rule, FinCEN revised the definition of “reporting company” in its implementing regulations to mean only entities formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction. FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
Foreign entities will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.
FinCEN is accepting comments and expects to issue final regulations at a future date.
Reporting Requirements
Below are the general guidelines for the CTA’s reporting requirement, which are subject to further guidance. This information is not meant to be legal or tax advice, and should not be applied to your specific facts and circumstances without consulting competent legal counsel or another professional adviser.
International companies required to report under the CTA include corporations, LLCs, or any similar entity formed under the law of a foreign country and registered to do business in any state or tribal jurisdiction by filing a document with a secretary of state or any similar office.
Are There Any Filing Exemptions?
There are 23 categories of exemptions including publicly traded companies, banks and credit unions, securities brokers/dealers, public accounting firms, tax-exempt entities, and certain inactive entities. These are not blanket exemptions, and many government-regulated companies already disclose their BOI to a government authority.
Most notably, certain “large operating entities” may be exempt from filing. To qualify for this exemption, the company must:
- Employ more than 20 full-time employees (average of at least 30 hours per week) in the U.S.
- Have reported gross revenue (net of returns and allowances) from U.S. sources of over $5 million on the prior year’s tax return.
- Have an operating presence at a physical location within the U.S.
The BOI Small Entity Compliance Guide provides further explanations and checklists for these nuanced exemptions.
Who Is a Beneficial Owner?
Any individual who, directly or indirectly, either:
- Exercises “substantial control” over a reporting company, or
- Owns or controls at least 25 percent of the ownership interests of a reporting company.
The CTA regulations define the terms “substantial control” and “ownership interest” further.
FinCEN expects every reporting company to have at least one individual to have “substantial control.”
What Information Is Reported?
Non-U.S. companies will have to report the following information: the full name of the reporting company, any trade name or doing-business-as name, business address, state or tribal jurisdiction of formation, and an IRS taxpayer identification number (TIN).
Additionally, information is required on the beneficial owners of the entity and, for newly created entities, the company applicants of the entity. The following individual information is required to be reported: full legal name, date of birth, current address, and legal identification.
Non-compliance Risks
FinCEN has indicated that it will waive penalties and fines for most non-compliance, and further guidance is expected. As written, penalties for willfully not complying with the BOI reporting requirement are steep and can result in criminal and civil penalties of $500 per day and up to $10,000, with up to two years of jail time.
This new law is unsettled, complex, and subject to interpretation. Additional information can be found at www.fincen.gov/boi. We urge you to contact your legal counsel to determine whether the CTA applies to you and your applicable reporting requirements.
