FinCEN Updates Beneficial Ownership Reporting Requirements

As of March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) has announced significant changes narrowing the scope of the reporting requirements for beneficial ownership information (BOI) under the Corporate Transparency Act. This update, consistent with the U.S. Department of the Treasury's recent announcement aims to simplify the process for U.S. companies and individuals.

Key Changes:

• U.S. companies and persons exempt:  U.S. companies and individuals are no longer required to report BOI to FinCEN. This exemption applies to all entities created in the United States, including those previously known as "domestic reporting companies."
• Foreign entities required to report: Only entities formed under foreign law and registered to do business in the U.S. are required to report BOI. The new rule also exempts these companies from having to report on any beneficial owners who are U.S. persons. These entities, previously known as “foreign reporting companies,” are now defined as "reporting companies" and must adhere to new deadlines for BOI reporting.
• Deadlines for foreign entities:
  • Entities registered before the publication of the interim final rule must file BOI reports within 30 days (April 20, 2025).
  • Entities registered on or after the publication date have 30 calendar days to file an initial BOI report after their registration becomes effective.

FinCEN is currently accepting comments on this interim final rule and plans to finalize it later this year.

These changes are expected to streamline compliance for U.S. businesses while ensuring transparency for foreign entities operating within the U.S. Stay tuned for further updates as FinCEN finalizes the rule.