New Interim Rule Removes CTA Reporting Requirements For U.S. Companies And U.S. Persons – Corporate and Company Law

On March 21, 2025, the U.S. Department of the Treasury’s
Financial Crimes Enforcement Network (“FinCEN”) issued an
interim final rule to the U.S. Corporate Transparency Act
(“CTA”) that eliminates beneficial ownership information
(“BOI”) reporting requirements for domestic entities and
U.S. persons. The immediate result of the interim final rule is
that no U.S. entities are required to register or update any BOI
reports, and no beneficial owners who are U.S. persons are required
to provide BOI.

The prior rule applied to:

• “domestic reporting companies”: entities created by a
  filing with a Secretary of State or any similar office, and




• “foreign reporting companies”: entities formed under
  the law of a foreign country and registered to do business in any
  U.S. state or tribal jurisdiction by the filing of a document with
  a Secretary of State or similar office.

These companies were required to file a report with FinCEN
identifying their beneficial owners—the persons who
ultimately own or control the company—and provide similar
identifying information about the persons who formed the entity,
absent an applicable exemption.

FinCEN stated that the interim final rule is intended to
minimize regulatory burdens on small businesses, a priority for the
new federal administration. In the preamble to the interim final
rule, FinCEN stated that most domestic reporting companies not
covered by an exemption under the prior rule were small businesses
and determined that exempting these domestic reporting companies
would not negatively impact national security, intelligence, or law
enforcement efforts. FinCEN concluded that much of the BOI that
would otherwise have been reported under the prior rule is provided
to financial institutions at the time an entity opens a bank
account or is otherwise available to law enforcement.

Modifications Under the Interim Final Rule:

• The interim final rule modifies the definition of
  “reporting company” to only include foreign reporting
  companies.




• All domestic reporting companies and their beneficial owners
  are exempt from the CTA and are not required to file or update any
  BOI reports.




• Non-exempt foreign reporting companies are still required to
  file BOI reports with FinCEN, but such reports are not required to
  include the BOI of any beneficial owner that is a “U.S.
  person”.




• Foreign reporting companies that only have beneficial owners
  that are “U.S. persons” are not required to report
  beneficial owners.




• The special rule for foreign pooled investment
  vehicles only requires disclosure of the individual
  exercising substantial control if that individual is
  not a U.S. person. If more than one individual
  exercises substantial control over a foreign pooled investment
  vehicle and at least one of those individuals is not a U.S. person,
  the entity is required to report BOI with respect to the non-U.S.
  person who has the greatest authority over the strategic management
  of the entity.

Both the prior rule and the interim final rule incorporate the
definition of “United States person” from the Internal
Revenue Code, which includes U.S. citizens as well as permanent
residents and persons who meet the substantial presence test under
the Internal Revenue Code. As a result, the exemptions for U.S.
persons apparently also apply to those foreign nationals who fall
under the Internal Revenue Code’s definition of United States
person. FinCEN appears to use the terms “U.S. person” and
“United States person” interchangeably.

Certain U.S. Persons Are Still Required to Report
BOI

U.S. persons who are company applicants (i.e., those persons who
directly file, and who are primarily responsible for filing, or
directing or controlling the filing of, the foreign reporting
company’s registration documents with a Secretary of State or
similar office) remain obligated to provide their BOI to non-exempt
foreign reporting companies.

Compliance Deadlines

The interim final rule is effective as of March 26, 2025.
Existing foreign reporting companies are required to file their BOI
reports by April 25, 2025. Foreign companies newly registered to do
business in a U.S. state or tribal jurisdiction will have thirty
days from the date they receive notice that the registration is
effective to file a BOI report.

The interim final rule will be open to comments until May 27,
2025; however, the interim final rule will be in effect during the
comment period. FinCEN indicated that it had good cause to
implement the interim final rule immediately, given that domestic
entities were facing a filing deadline of March 21, 2025 and there
was not enough time to solicit public comment and implement a final
rule before that deadline. FinCEN intends to issue a final rule
before the end of the year.

The CTA remains subject to a number of legal challenges despite
the issuance of the interim final rule.

We continue to closely monitor further developments with respect
to the CTA.

New Interim Rule Removes CTA Reporting Requirements For U.S.
Companies And U.S. Persons

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