FinCEN Narrows CTA Scope: Most U.S. Companies Exempt, April 20 Deadline Looms for Foreign Entities

In a major regulatory shift, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule on March 21, 2025, that dramatically reduces the number of businesses and individuals required to file Beneficial Ownership Information (BOI) reports under the Corporate Transparency Act (CTA).

Bottom Line: Most U.S. domestic companies are now exempt.

Who’s Still Required to Report BOI?

Under the revised rule, only foreign entities are generally now subject to CTA filing requirements. Specifically, a “reporting company” now includes those that are:

• Formed under foreign law, and

• Registered to do business in the U.S. through a filing with a secretary of state (or similar office)

As a result, domestic entities generally are no longer required to file BOI reports.

What About U.S. Individuals and Previously Filed Reports?

Importantly, FinCEN clarified its interpretation that:

• Foreign reporting companies are no longer required to report U.S. individuals as beneficial owners, and

• U.S. persons are no longer required to provide personal BOI information in relation to foreign entity filings

Already Filed But Now Exempt?

FinCEN has confirmed its interpretation that companies or individuals who previously submitted BOI reports but are now exempt under the interim rule are not required to file an update or correction.

Once an entity becomes exempt, it is no longer subject to any CTA reporting obligations (including updates).

Key Filing Deadlines for Foreign Reporting Companies

• Registered before March 21, 2025: File your initial BOI report by April 20, 2025

• Registered on or after March 21, 2025: File within 30 calendar days of effective registration

Why Did FinCEN Scale Back?

FinCEN stated the new rule better aligns with the intent of the Corporate Transparency Act, while reducing the regulatory burden on small U.S. businesses. Treasury previously signaled the move, citing concerns about unnecessarily sweeping requirements for domestic entities.

Indeed, FinCen originally had estimated that somewhere in the neighborhood of 5 million entities would have been reporting. Almost undoubtedly, many hundreds of thousands of entities already filed. An enormous tax on time and other resources.

Effective Date and Comment Period

• Rule Effective Date: March 26, 2025

• Public Comments Accepted Until: May 27, 2025

FinCEN is expected to finalize the rule later this year, following its review of public input.

Next Steps for U.S. and Foreign Companies

If you’re a U.S.-formed company with only U.S. owners, you’re exempt. No BOI filing or update needed.

If you’re a foreign entity registered to do business in the U.S., review your structure and get ready to file by April 20 (or within 30 days after registration).

There remain a number of open questions, some of which may be answered in the coming months and others of which will undoubtedly require sophisticated legal interpretation and risk management.

Resources

• FinCEN Press Release: https://www.fincen.gov/news/news-releases

• Read the Interim Final Rule (PDF): https://www.govinfo.gov/content/pkg/FR-2025-03-26/pdf/2025-05199.pdf

Want more information about your CTA obligations or whether you still need to file?

Contact Troy Garris at troy@garrishorn.com for more.