Authors
Mark M. Christopher
Director, Boston
mchristopher@goulstonstorrs.com+1 617 574 3513
David L. Coombs
Director, Boston
dcoombs@goulstonstorrs.com+1 617 574 3563
Gary M. Ronan
Director, Boston
gronan@goulstonstorrs.com+1 617 574 3593
Vaishali Goyal
Associate, Boston
vgoyal@goulstonstorrs.com+1 617 574 2242On March 21, 2025, the Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule that significantly changes the reporting requirements under the Corporate Transparency Act (“CTA”). This alert summarizes the key changes to the reporting requirements and what they mean for your business.
Key Takeaways
Domestic companies are now exempt from all reporting requirements.
Foreign companies and foreign pooled investment vehicles no longer need to report U.S. person beneficial owners2 (but will need to report any non-U.S. person beneficial owners).
Compliance is still effectively voluntary as FinCEN has announced it will not be enforcing penalties and this rule is not yet effective.
Exemption for Domestic Companies
All domestic reporting companies are now completely exempt from the requirement to:
- File initial beneficial ownership information (“BOI”) reports.
- Update previously filed BOI reports.
- Correct previously filed BOI reports.
FinCEN states that this reduction of requirements will eliminate the substantial compliance burdens for millions of U.S. businesses whose information would not be “highly useful” in the efforts to “detect, prevent, or prosecute money laundering, the financing of terrorism of terrorism, proliferation finance, serious tax fraud, or other crimes.”3
Changes for Foreign Companies
Foreign companies still must report beneficial ownership information, but with two important exemptions:
- Foreign companies are exempt from reporting beneficial ownership information for any U.S. persons who are beneficial owners.
- U.S. persons are exempt from providing their beneficial ownership information to foreign companies.
Foreign companies with only U.S. beneficial owners will not need to report any beneficial owners.
Changes for Foreign Pooled Investment Vehicles
Foreign pooled investment vehicles now only need to report:
- Non-U.S. individuals who exercise substantial control over the entity (not an individual who has the greatest authority over the strategic management of the entity).
- If multiple non-U.S. individuals exercise control, only the non-U.S. person with the greatest authority must be reported.
Foreign pooled investment vehicles with only U.S. beneficial owners will not need to report any beneficial owners.
Extended Deadline
Foreign reporting companies and pooled investment vehicles will have until the later of 30 days after this rule is published in the federal register, or 30 days after their registration to do business in the United States.
Next Steps
FinCEN is accepting comments on this interim final rule. The agency will assess these exemptions based on public comments and plans on issuing a final rule later this year.
If you have any questions about the interim rule, please contact your usual Goulston & Storrs attorney.
1 See our prior advisories on the general application of the CTA (https://perspectives.goulstonstorrs.com/post/102iuzk/understanding-the-corporate-transparency-act-and-ensuring-compliance) and its specific application for those with entities for estate planning purposes (https://perspectives.goulstonstorrs.com/post/102iuv0/a-guide-to-the-corporate-transparency-act-for-individuals-with-closely-held-busin) for information on what is a domestic reporting company, a foreign reporting company, and beneficial owner information.
2 As a reminder, generally a beneficial owner is any individual who (directly or indirectly) (a) exercises substantial control over the company or (b) owns or controls at least 25% of the company’s ownership interests.
3 Please see full rule and explanation from FinCEN here.
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