On March 26, 2025, the Financial Crimes Enforcement Network (FinCEN) published an interim final rule that significantly reduces the scope of reporting obligations under the Corporate Transparency Act (CTA). Effective immediately upon publication, the rule provides sweeping exemptions and narrows the definition of entities required to file Beneficial Ownership Information (BOI) reports.
Under the new rule, all U.S.-domiciled entities and U.S. individuals—formerly classified as “domestic reporting companies”—are fully exempt from BOI reporting requirements. This means corporations, LLCs, partnerships, trusts, and other entities formed under U.S. state or tribal law no longer need to file or update BOI reports with FinCEN. U.S. persons are similarly relieved from BOI reporting obligations, even if they hold ownership in foreign entities.
The only businesses still required to file BOI reports under the CTA are foreign entities that (a) were formed under foreign law and (b) have registered to conduct business in the U.S. by submitting documents to a state or tribal secretary of state. Even in those cases, companies do not need to report information on U.S. beneficial owners. Reporting is required only for non-U.S. beneficial owners. Entities whose owners are exclusively U.S. persons qualify for exemption unless other BOI obligations apply.
FinCEN also established new deadlines for compliance. Foreign reporting companies that were registered prior to March 26, 2025, must submit their initial BOI reports within 30 days (generally by April 25, 2025). Those registering on or after the interim rule’s effective date must file within 30 calendar days of receiving notice that their registration is effective. Failure to file or correct information within those windows may trigger penalties, though FinCEN has suspended enforcement actions for domestic entities.
FinCEN will accept public comments on the interim final rule for approximately 60 days following publication (through May 27, 2025), with no guarantee of changes. Further adjustments are possible pending legal developments or final rulemaking decisions later in 2025.
For legal counsel, compliance professionals, and business owners, the practical implications are significant. U.S. companies and individuals no longer bear the BOI reporting burden originally imposed under the CTA. Yet corporations with cross-border exposure—during formation or ownership—should carefully assess whether they now qualify as foreign reporting companies subject to BOI obligations. Companies that previously filed may need to revisit and potentially withdraw or amend filings.
This interim rule stems from broader regulatory shifts and litigation impacting the CTA since its enactment in 2021. Although designed to enhance transparency and combat illicit finance, the CTA’s implementation has been slowed by legal challenges, enforcement delays, and administrative guidance through successive administrations. The March rule reflects FinCEN’s effort to realign enforcement policy, easing regulatory burdens on U.S.-based entities while maintaining some oversight of foreign-origin entities operating in the U.S.
Though the decision significantly relaxes BOI compliance, uncertainty remains. Courts may review the rule’s legality, congressional interest in revisiting CTA mandates may re-emerge, and public comments could shape the final rule. Until then, the rule constitutes the current operative standard: domestic entities are exempt from BOI reporting, while only certain foreign reporting companies remain subject—and even they are relieved from reporting U.S. beneficial owners.
This interim final rule represents a substantial recalibration of the CTA landscape, marking a major shift in U.S. anti-money laundering policy as it pertains to corporate transparency.
