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Corporate Transparency Act Enforcement Shift – U.S. Entities Exempt from Reporting

Key Takeaway:

Fort Lauderdale, Fla. (March 25, 2025) - On March 21, 2025, consistent with the U.S. Department of the Treasury’s March 2, 2025, announcement, the Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule fundamentally revising the scope of implementation of the Corporate Transparency Act (“CTA”). U.S. companies and individuals are now exempt from beneficial ownership information (“BOI”) reporting requirements. Only foreign entities registered to do business in the U.S. are required to report, with new deadlines established.

1. What Changed?

FinCEN’s interim final rule, published on March 21, 2025, introduces the following changes:
 

  • Exemption for U.S. Entities: All entities formed in the United States, previously classified as “domestic reporting companies,” and their beneficial owners are now exempt from BOI reporting requirements.
     
  • Redefined “Reporting Company”: The term now exclusively refers to entities formed under foreign laws that are registered to do business in any U.S. state or tribal jurisdiction.
     
  • No Reporting of U.S. Beneficial Owners by Foreign Entities: Foreign entities meeting the new “reporting company” definition are not required to report U.S. persons as beneficial owners.


2. Who Still Needs to Report?

The revised rule mandates BOI reporting only for entities that:
 

  1. Are formed under the laws of a foreign country; and
     
  2. Are registered to do business in any U.S. state or tribal jurisdiction.


These foreign entities must file BOI reports unless they qualify for one of the CTA’s listed exemptions (see LBBS CTA article published on January 23, 2024). Notably, they are not required to report U.S. persons as beneficial owners, and U.S. persons are not obligated to provide BOI for such entities. 

3. New Deadlines for Foreign Reporting Companies
 

  • Existing Foreign Entities (registered to do business in the U.S. before March 21, 2025) must file BOI reports by April 20, 2025 (30 days post-publication).
     
  • New Foreign Entities (registered on or after March 21, 2025) must file initial BOI reports within 30 calendar days of their registration becoming effective.


4. Background and Rationale

This regulatory shift follows litigation developments that temporarily blocked CTA enforcement and prompted a reassessment of the CTA’s burdens (see previous Lewis Brisbois Alerts here and here). The current administration emphasizes deregulation and reducing compliance burdens on small businesses, aligning with Executive Order 14192. The Treasury Department, with concurrence from the Departments of Justice and Homeland Security, determined that BOI reporting by U.S. entities “would not serve the public interest” and offers limited value to national security or law enforcement efforts. There remains concern over illicit finance risks associated with foreign entities, particularly those linked to adversarial regimes or money laundering activities. 

Next Steps

FinCEN is accepting public comments on the interim final rule and plans to issue a final rule later this year. In the meantime, U.S.  companies do not need to take any action.Foreign entities registered to do business in the U.S. should evaluate whether they qualify for an exemption and, if not, ensure timely compliance with the new reporting deadlines.

Our team is here to help you navigate these changes effectively. For detailed inquiries or to discuss how these changes may specifically affect your business, please reach out to our listed attorneys. We remain committed to keeping you informed with the most current and relevant information as it becomes available.

Author:

Soo Jin Isicoff, Associate

Editors:

Jeffrey Weinstock, Partner

Jane C. Luxton, Managing Partner - Washington, D.C.

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