Introduction

The Financial Crimes Enforcement Network (FinCEN) adopted an interim final rule on March 26, 2025, to the Corporate Transparency Act (CTA) significantly narrowing reporting obligations. These changes, effective immediately (with a comment period that ends May 27, 2025), limit obligations to “foreign reporting companies” and exempt “foreign reporting companies” from reporting beneficial ownership interests (BOI) of US persons. Though not yet the final rule, we don’t anticipate significant changes in the final rule to be published after the comment period. This summary outlines the key modifications, their implications for US and foreign businesses, and the anticipated future developments. 

Key Changes to the Corporate Transparency Act

Exemption for Domestic Reporting Companies
The most notable change introduced by the interim final rule is the exemption of “domestic reporting companies” from the BOI reporting requirements. Previously, the CTA mandated that both domestic and foreign entities report their beneficial ownership information to FinCEN unless the entity qualified for an exception. However, under the new rule, entities formed in the United States, including trusts, corporations and limited liability companies (LLCs), are no longer required to file, update or correct BOI reports.

Exemption for US Persons
In addition to exempting domestic companies, the interim final rule also exempts US persons from reporting their beneficial ownership information, even if they are beneficial owners of foreign entities doing business in the US. Consequently, foreign reporting companies are not required to report the BOI of their US owners.

Continued Reporting Requirements for Foreign Companies
While domestic entities and US persons are exempt, foreign reporting companies must continue to comply with BOI reporting requirements, albeit with certain modifications. These companies are required to report BOI only for non-US persons who are beneficial owners. Foreign companies are required to file BOI reports within 30 days of the publication of this final rule or 30 days after their registration to do business in the United States. The rule also introduces exemptions for foreign pooled investment vehicles for those in which a US person exercises substantial control over the entity.

Future Developments
FinCEN is accepting public comments on the interim final rule for 60 days ending on May 27, 2025, and intends to issue a final rule later this year. We anticipate that under the current Administration and based upon the current agency’s composition and considerations, that any changes will largely center on foreign entity reporting and non-US citizen requirements for any additional adjustments in the final rule.

In conclusion, the recent changes to the CTA represent a significant shift in US financial regulations, reflecting a reassessment of regulatory priorities and a focus on reducing burdens on domestic businesses. As FinCEN continues to solicit comments and refine the rule, businesses should remain vigilant and assess their compliance obligations, particularly if operating internationally.

We know that the final rule may have additional nuances included during the comment period, but we don’t expect significant deviations from the interim rule and obligations for domestic companies.

Additional Authors: Amy McDaniel Williams and Conor Shary