On 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

1. Domestic companies¹ are now exempt from all reporting requirements. 
2. 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). 
3. 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:

1. File initial beneficial ownership information (“BOI”) reports. 
2. Update previously filed BOI reports. 
3. 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:

1. Foreign companies are exempt from reporting beneficial ownership information for any U.S. persons who are beneficial owners. 
2. 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:

1. 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). 
2. 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.  

 ¹ See our prior advisories on the general application of the CTA and its specific application for those with entities for estate planning purposes 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.