FinCen Rule Says Beneficial Ownership Reporting Required Only for Foreign Companies

FinCEN Eliminates Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons, Establishes New Rules for Foreign Entities

The Financial Crimes Enforcement Network (FinCEN) has issued an interim final rule removing the obligation for U.S. companies and U.S. persons to report beneficial ownership information (BOI) under the Corporate Transparency Act (CTA).

This update follows the U.S. Department of the Treasury’s announcement on March 2, 2025, and marks a significant revision to the scope of the CTA’s reporting requirements.

What’s Changed?

FinCEN’s new rule revises the definition of a “reporting company” to include only those entities formed under foreign law that are registered to do business in the United States through a state or tribal filing. These entities—formerly known as “foreign reporting companies”—are now the only entities subject to the CTA’s BOI reporting rules. Key highlights of the interim rule include:

• U.S. Companies Exempt: All entities formed in the United States—previously referred to as “domestic reporting companies”—are now exempt from BOI reporting obligations.
• No Reporting for U.S. Persons: U.S. persons, including those who are beneficial owners of foreign entities, are not required to report BOI under the revised rule.
• Narrower Definition of “Reporting Company”: The reporting requirement now applies only to foreign entities that have registered to do business in a U.S. state or tribal jurisdiction, provided they do not qualify for any applicable exemption.
• New Deadlines for Foreign Entities: Foreign entities that meet the updated definition must comply with new BOI reporting deadlines, although they are not required to report any U.S. persons as beneficial owners.

This streamlined approach significantly reduces the compliance burden on U.S. companies and individual U.S. stakeholders, while maintaining BOI disclosure obligations for certain foreign entities doing business in the United States.

What This Means for Your Business

If your company was formed in the United States, you are no longer required to file BOI reports with FinCEN. This change may alleviate some of the administrative and legal complexities associated with CTA compliance. However, if your business is a foreign entity registered to operate in the U.S., you may still be required to report—so it’s important to assess your status under the new rule.

At Lipresti Law, we assist clients with navigating regulatory changes like these and evaluating their impact on corporate governance and compliance programs. If you have questions about how this update affects your business, we’re here to help.