FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies & U.S. Persons, Announces New Deadlines for Foreign Companies

Key Takeaways

• U.S. Companies Exempt: U.S. companies and U.S. persons are no longer required to report beneficial ownership information to FinCEN under the Corporate Transparency Act.
• Foreign Companies Must Report: The new rule applies to foreign entities registered to do business in the U.S., which must report their beneficial ownership information.
• New Reporting Deadlines: Foreign companies registered before the rule’s publication must submit their BOI reports within 30 days; those registering after must report within 30 calendar days of receiving registration notice.
• No U.S. Person Reporting: Foreign entities are not required to report U.S. persons as beneficial owners, and U.S. persons are exempt from reporting for foreign companies.

Deep Dive

The Financial Crimes Enforcement Network (FinCEN) has just issued an interim final rule that revises key aspects of the Corporate Transparency Act. As of now, U.S. companies and U.S. persons will no longer need to report their beneficial ownership information (BOI) to FinCEN. Instead, the new focus is squarely on foreign companies doing business in the United States, with a clearer framework that streamlines compliance requirements.

This shift follows the U.S. Department of the Treasury’s March 2 announcement, which set the stage for FinCEN to implement changes to its BOI rules. The biggest update? The definition of a “reporting company” is now limited to foreign entities that are formed under foreign laws but have registered to do business in any U.S. state or tribal jurisdiction. These foreign entities, previously known as “foreign reporting companies,” are now the primary focus of FinCEN’s BOI requirements.

For U.S.-based companies, it’s a different story. The revised rule means that all domestic entities are now exempt from having to disclose their beneficial owners to FinCEN. This includes companies that were once classified as “domestic reporting companies” under the old regulations. In short, if your company is based in the U.S., the need to report BOI is no longer in the cards.

But don’t think that means all reporting is off the table. Foreign companies that fall under the new definition of a “reporting company” will still need to comply with BOI reporting obligations. These companies will be required to report their beneficial ownership to FinCEN – but there’s a clear distinction. They will not have to report U.S. persons as their beneficial owners. Additionally, U.S. persons will not need to disclose ownership information for these foreign entities they may be tied to.

For those foreign companies caught in the new reporting requirements, the timeline is tight but clear:

• For foreign companies already registered to do business in the U.S. before the publication of this interim final rule: These companies have 30 days from the rule’s publication to submit their BOI reports.
• For foreign companies registering on or after the publication date: They must submit their initial BOI report within 30 calendar days of receiving notice that their registration has been accepted.

FinCEN is accepting public comments on the interim final rule, and expects to finalize the regulations later this year. This change is significant, especially for foreign companies operating in the U.S. These entities will need to move swiftly to understand and comply with the new deadlines and requirements.

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