The Financial Crimes Enforcement Network has released a new interim rule that eliminates the obligation for American companies and US citizens to submit beneficial ownership information under the Corporate Transparency Act. This major regulatory change significantly impacts the BOI report filing process.
Background of the Regulatory Changes
As previously outlined in a February 28, 2025 update, FinCEN announced on February 27 its plans to release an interim rule by March 21, 2025. This rule would extend filing deadlines and potentially modify the existing regulatory framework.
On March 2, the US Department of the Treasury released a statement indicating that the upcoming rule would likely exempt US citizens and US-owned companies from CTA reporting obligations. The focus would shift toward enforcement against foreign-owned entities.
The March 21 Interim Final Rule
FinCEN delivered on its commitment by issuing the interim final rule on March 21. This rule removes BOI reporting obligations for US companies and American citizens under the Corporate Transparency Act.
Key Changes to Reporting Company Definition
The interim rule fundamentally changes what qualifies as a “reporting company.” Under the new definition, only entities formed under foreign country laws that have registered for business operations in any US state or tribal jurisdiction qualify as reporting companies. These were previously called “foreign reporting companies.”
This change means that all US-created entities, including those formerly classified as “domestic reporting companies,” along with their beneficial owners, are now exempt from filing a BOI report.
Furthermore, foreign entities required to submit reports to FinCEN are not obligated to list any US citizens as beneficial owners.
Filing Requirements for Foreign Entities
Foreign entities meeting the revised “reporting company” definition and lacking exemption qualifications must follow these filing timelines:
- Pre-existing registrations: Foreign entities registered for US business operations before the interim rule’s publication date have 30 calendar days from publication to file their BOI report.
- New registrations: Foreign entities registering for US business operations on or after the publication date must submit their reports within 30 calendar days of receiving their registration effectiveness notice.
Practical Impact of the Rule
Because relatively few foreign companies register for business operations in the United States, this interim rule effectively removes the BOI reporting requirement almost entirely. This includes US companies with foreign ownership.
This approach appears designed to achieve short-term political and legal goals by maintaining the pause on CTA compliance amid ongoing court cases and congressional discussions.
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Future Rule-Making Process
FinCEN plans to collect public feedback on the interim rule and evaluate the exemption of domestic reporting companies and their beneficial owners. A final rule is expected later in 2025.
Congressional Response and Potential Changes
The removal of reporting requirements for all US companies has raised concerns among some members of Congress. Critics argue that this undermines the CTA’s original purpose of preventing money laundering risks.
When FinCEN issues its final rule, it may reinstate BOI reporting requirements for US companies with foreign ownership that pose anti-money laundering concerns.
What This Means Moving Forward
Organizations should stay informed about ongoing developments in the rule-making process, pending CTA-related legislation, and other regulatory events. The regulatory landscape remains fluid as FinCEN balances political considerations, legal challenges, and the original anti-money laundering objectives of the Corporate Transparency Act.
As the situation continues to evolve throughout 2025, businesses should monitor official announcements and prepare for potential changes to the final rule that may reimpose certain reporting obligations.
