U.S. businesses have been closely watching the rollout of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements. But thanks to a recent interim final rule from the Financial Crimes Enforcement Network (FinCEN), the scope of who must file has been significantly narrowed.
How did we get here?
As you may recall, ongoing litigation had caused BOI reporting to be off, then on again, then off again. On February 17, 2025, a judge in the Smith v. United States Department of the Treasury case lifted the last nationwide injunction on BOI reporting. As a result, on February 19, FinCEN reinstated the BOI reporting requirement, with a 30-day delay, setting the new effective date as March 21, 2025.
However, on February 27, FinCEN issued a notice regarding fines and penalties and announced it would extend the reporting deadlines. Then, on March 2, the U.S. Treasury Department issued a press release stating that it would publish an interim final rule removing the requirement for U.S. companies and U.S. persons to report BOI to FinCEN.
Finally, on March 21, FinCEN issued the interim final rule, which is effective immediately upon publication in the Federal Register.
U.S. Companies and U.S. persons are not required to report BOI
The interim rule excludes domestic companies from the scope of the term “reporting company,” which means the Corporate Transparency Act (CTA) no longer applies to all U.S. companies across the board. A U.S. company includes a corporation, limited liability company, or other entity created by the filing of a document with a secretary of state (or similar office) under the laws of any state or Tribal jurisdiction. Therefore, all entities formed in the U.S. are exempt from any beneficial ownership information (BOI) reporting requirement.
It’s important to note that foreign ownership does not trigger BOI reporting. U.S. companies are not required to file a BOI report solely because their beneficial owners are foreign.
Additionally, as we know, single-member LLCs are treated as disregarded entities for tax purposes. A common question has been whether a single-member LLC owned by a foreign person would still be subject to CTA reporting. The answer is no—such an LLC is still considered a domestic entity for purposes of the CTA and is therefore not required to file a BOI report under the interim rule.
Finally, U.S. persons are not required to report BOI with respect to any foreign entity in which they are a beneficial owner. Note that the definition of a “U.S. person” is provided under Section 7701(a) of the Internal Revenue Code and includes:
- A U.S. citizen
- A resident alien, which includes a lawful permanent resident (a “green card holder”) or a foreign individual who meets the substantial presence test
- A domestic partnership
- A domestic corporation
- Any estate other than a foreign estate
- A trust that satisfies both the “court test” and the “control test”
The New Definition of “Reporting Company”
The rule updates the definition of a “reporting company” to include only entities formed under the laws of a foreign country that have registered to do business in any U.S. state or Tribal jurisdiction. In addition, these foreign reporting companies will not be 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 in which they are beneficial owners.
Important Deadlines
For foreign entities that meet the new definition of a reporting company:
- If registered in the U.S. before March 21, 2025, the deadline to file an initial BOI report is April 20, 2025.
- If registered on or after March 21, 2025, the entity has 30 calendar days from the date it receives notice of its effective registration to file its BOI report.
Conclusion
This interim rule is a welcome clarification for many taxpayers and advisors who have been navigating the uncertainty surrounding BOI filing requirements. It confirms that foreign ownership alone does not trigger a filing obligation and redefines the scope of who must file under the Corporate Transparency Act.
Keep in mind that this is an interim rule, and FinCEN is accepting public comments with the intention to finalize the rule later this year.
If you have questions about how this rule affects your business—or whether your company qualifies as a reporting company—now is the time to review your entity structure and ensure compliance ahead of the key 2025 deadlines.
