Recent regulatory changes have significantly altered the enforcement of the Corporate Transparency Act (“CTA”), particularly concerning reporting obligations for domestic and foreign entities. As of March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”) has issued an interim final rule that exempts U.S. entities and individuals from Beneficial Ownership Information (“BOI”) reporting requirements. Consequently, only foreign entities registered to do business in the United States are now subject to these reporting obligations.

Key Changes

1. Exemption for U.S. Entities: All entities formed within the United States, previously classified as “domestic reporting companies,” along with their beneficial owners, are now exempt from BOI reporting requirements.
2. Redefined “Reporting Company”: The term now exclusively refers to entities formed under foreign laws that are registered to conduct business in any U.S. state or jurisdiction.
3. Reporting Obligations for Foreign Entities: Foreign entities meeting the “reporting company” definition are required to file BOI reports unless they qualify for specific exemptions. Notably, these entities are not obligated to report U.S. persons as beneficial owners, and U.S. persons are not required to provide BOI for such entities.

Compliance Deadlines for Foreign Entities

• Existing Foreign Entities: Those registered to do business in the U.S. before March 21, 2025, must file BOI reports by April 20, 2025 (30 days post-publication of the interim rule).
• New Foreign Entities: Entities registering on or after March 21, 2025, are required to file initial BOI reports within 30 calendar days of their registration becoming effective.

Considerations and Conclusion

The U.S. Treasury Department’s decision to limit the CTA’s applicability to foreign reporting companies aims to reduce regulatory burdens on American small businesses. This move aligns with the administration’s emphasis on deregulation and supporting domestic enterprises.

FinCEN is applying all exemptions and deadline extensions in the interim final rule effective immediately, in advance of formal publication in the Federal Register, and will not further enforce any BOI reporting penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners.

For foreign entities, it is imperative for affected organizations to understand their obligations and ensure timely compliance. For further guidance or clarification, please do not hesitate to reach out to us.