FinCEN Narrows Scope of Corporate Transparency Act

On March 26, 2025, the Financial Crimes Enforcement Network’s (“FinCEN”) interim final rule (the “Interim Rule”) exempting domestic entities and U.S. persons from reporting beneficial ownership information (“BOI”) under the Corporate Transparency Act (the “CTA”) was published in the Federal Register.

Summary of Changes

U.S. companies and U.S. persons are no longer required to report BOI to FinCEN.
Only foreign companies registered to do business in the U.S. are now considered “reporting companies,” unless exempt.
Foreign entities are not required to report U.S. beneficial owners, and U.S. persons are not required to report ownership in such entities.
Foreign entities are required to report only the BOI of non-U.S. beneficial owners and their company applicants.

Revised “Reporting Company” Definition

Under the Interim Rule, an entity created by the filing of a document with a secretary of state or similar office under the laws of a U.S. state or Indian tribe (previously defined as a “domestic reporting company”) is no longer defined as a “reporting company.”

An entity is now defined as a “reporting company” only if it is formed under the laws of a country other than the U.S., but which has registered to do business with a secretary of state or similar office under the laws of a U.S. state or Indian tribe (previously defined as a “foreign reporting company”). This encompasses nearly all non-U.S. statutory entities (e.g. corporations, limited liability companies, partnerships, etc.) unless an exemption applies.

BOI of U.S. Persons Now Exempt

Previously, a reporting company was required to report all BOI regardless of the nationality of the beneficial owner. Under the Interim Rule, a reporting company is not required to report the BOI of any U.S. persons who are beneficial owners of the reporting company. Accordingly, a reporting company that has only beneficial owners that are U.S. persons is exempt from the requirement to report any beneficial owners. Moreover, U.S. persons are not required to report BOI to the reporting company, even if they are beneficial owners of the reporting company.

New BOI Reporting Deadline

Reporting companies must file a BOI report with FinCEN identifying its company applicants and the BOI of its non-U.S. beneficial owners. The BOI report is due by the later of thirty days after the company’s registration to do business in the United States or thirty days after the date the Interim Rule is published in the Federal Register (i.e., by Friday, April 25, 2025).

Impact on Ongoing Litigation

The Interim Rule marks a significant departure from the prior framework under the CTA and will dramatically reduce the compliance burden for most companies and individuals. It is unclear what impact, if any, the Interim Rule will have on cases challenging the constitutionality of the CTA (e.g., Texas Top Cop Shop, Inc., et al. v. Garland, et al.).

FinCEN is accepting comments on the Interim Rule until Tuesday, May 27, 2025, and will assess the CTA exemptions, as appropriate, in light of such comments. FinCEN intends to issue a final rule later this year.

Please visit the Seyfarth Corporate Transparency Act page for general information about the CTA or contact a member of the Seyfarth CTA Task Force with any questions or for assistance in assessing whether your entity remains subject to BOI reporting obligations under the Interim Rule.