On March 26, 2025, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) published in the Federal Register an interim final rule that proposes to substantially narrow the existing beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) to “require only entities previously defined as ‘foreign reporting companies’ to file a BOI report.
As written, the interim rule would result in changes to BOI reporting under the CTA as follows:
(1) U.S. reporting companies would no longer be required to file a BOI report with FinCEN or update or correct a BOI previously reported to FinCEN;
(2) “U.S. persons” will not have to provide BOI reporting information to “foreign reporting companies” for which they are a beneficial owner; and
(3) foreign pooled investment vehicles do not have to make a BOI report of “U.S. persons who exercise substantial control over the entity.”
The interim rule does not change the existing requirement for foreign reporting companies to file BOI reports, and to update or correct previously filed BOI reports, although it does give foreign reporting entities additional time to comply by extending the filing deadline by 30 days from the date of the interim rule’s publication.
Most experts believe that FinCEN’s final rule will closely track the narrower reporting requirements set out in the interim rule. FinCEN’s interim rule takes advantage of the CTA’s grant of authority to the Secretary of the Treasury to exempt from the statute’s BOI reporting requirements any “entity or class of entities for which such reporting” would not serve the public interest. In proposing an exemption for U.S. reporting companies from the CTA’s initial BOI reporting requirements, FinCEN focused on the initial “total aggregate labor costs” to U.S. reporting companies estimated at more than $21.7 billion — an outlay that is predicted to escalate to $3.3 billion annually — in concluding that the costs to comply with the CTA’s proposed BOI reporting requirements “would hurt small businesses during financially difficult times.”
We will continue to monitor this issue closely and provide you with updates regarding the interim rule and status of the CTA’s BOI reporting requirements. If you have questions about the CTA’s requirements or just want to ensure your business is on the right track, please feel free to reach out to Timothy Hughes, at (703) 526-5582 or thughes@beankinney.com, or Doug Taylor, at rdougtaylor@beankinney.com or (703) 525-4000. Our firm practices in Virginia, Maryland, and the District of Columbia in addition to various other jurisdictions and can help you through this process.
This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.