FinCEN Issues Interim Final Rule Exempting U.S. Entities From Filing BOI Reports Under The CTA

On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule (IFR) that removes the requirement for U.S. entities and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA). The IFR is consistent with the U.S. Department of the Treasury's March 2, 2025, announcement regarding this issue.

Exemption Provided for U.S. Domestic Entities

In the IFR, FinCEN:

• Revised the definition of "reporting company" in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have 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 (formerly known as "foreign reporting companies").
• Exempted U.S. entities (previously known as "domestic reporting companies") from BOI reporting requirements.

Modified Deadlines for BOI Reporting Provided for Foreign Reporting Companies

Under the IFR, non-U.S. entities that meet the new definition of a "reporting company" and do not qualify for an exemption from the BOI reporting requirements must report their BOI to FinCEN under new deadlines, detailed below. However, these foreign entities are not required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.

For nonexempt foreign entities that are reporting companies, the IFR imposes the following deadlines:

• Nonexempt foreign reporting companies registered to do business in the United States before the date of publication of the IFR in the Federal Register must file BOI reports no later than 30 days from the publication date. If, as expected, the IFR is published in the Federal Register on March 26, 2025, BOI reports will need to be filed by these foreign reporting companies on or before April 25, 2025.
• Nonexempt foreign reporting companies registered to do business in the United States on or after the date of publication of the IFR in the Federal Register have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.

Is the CTA Finally Dead?

The CTA is not dead... yet.

The IFR does not of itself terminate the CTA. Even under the IFR, the CTA still applies to non-U.S. reporting companies. In addition, according to the IFR, FinCEN is accepting comments on the IFR and intends to finalize the rule later this year. Comments on the IFR must be submitted to FinCEN within 60 days of publication of the IFR in the Federal Register. The final rule, which can only be published after the comment period ends, could be quite different from the current IFR.

In the meantime, we may also see:

• The continued pursuit of current judicial challenges to the CTA's constitutionality, which are proceeding at various stages in courts across the country.
• New judicial challenges to the IFR being brought by interested parties.
• New congressional efforts to modify the substance of the CTA to more closely conform the language of the CTA with the IFR. For example, Congress might seek to remove domestic reporting companies from the scope of the CTA and allow FinCEN to add additional excepted categories to the definition of a beneficial owner (such as U.S. citizens).
• External pressure on the United States to enforce the CTA from other countries and organizations such as the Financial Action Task Force, the international anti-money laundering standard-setting body.

Given the ongoing uncertainties surrounding the CTA, both U.S. and foreign reporting companies and their U.S. and foreign beneficial owners would be well-advised to continue to closely monitor CTA developments even if they are (for the time being at least) exempt from BOI reporting under the IFR.