Beneficial Ownership Information Reporting Requirements Removed for U.S. Companies, U.S. Persons; Compliance Deadline Extended
Under an interim final rule published in the Federal Register on March 26, 2025, and consistent with the Treasury Department’s March 2, 2025, announcement, the Financial Crimes Enforcement Network (FinCEN) removed the requirement for U.S. persons and U.S. companies to report beneficial ownership information (BOI) under the Corporate Transparency Act (CTA). The interim final rule also extended the deadline for foreign reporting companies to file initial BOI reports or update and/or correct previously filed BOI reports.
Foreign Reporting Only
The interim final rule, which is expected to be finalized later this year after receipt of requested written comments due on or before May 27, 2025, revised the definition of “reporting company” to include only foreign reporting companies. For this purpose, “foreign reporting company” means “any entity that is: (A) A corporation, limited liability company, or other entity; (B) Formed under the law(s) of a foreign country; and (C) Registered to do business in any State or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of that State or Indian tribe.”
Accordingly, all domestic reporting companies and their Beneficial Owners are exempt from the BOI reporting requirement. The interim final rule does this by removing the term “domestic reporting company” from the definition of reporting company and including an explicit exemption for “any entity that is: (A) a corporation, limited liability company, or other entity; and (B) created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe.” The CTA defines a Beneficial Owner as any individual who, directly or indirectly, (1) exercises substantial control over a reporting company or (2) owns or controls at least 25 percent of the ownership interests of a reporting company.
Additionally, the interim final rule exempts foreign reporting companies and their U.S. Beneficial Owners from the requirement to provide the BOI of any U.S. persons who are Beneficial Owners of the foreign reporting company. The rule provides that U.S. persons need not provide BOI to any foreign reporting company of which they are a Beneficial Owner. As such, only the BOI of non-U.S. persons must be reported by an applicable foreign reporting company under the rule.
Similarly, regarding the special rule associated with foreign pooled investment vehicles, reporting the BOI of U.S. persons who exercise substantial control over the entity is not required under the interim final rule. Thus, if a non-U.S. person with substantial control over the entity does not exist, the foreign pooled investment vehicle need not report any Beneficial Owners.
Deadline Extended
The interim final rule extends the deadline for a foreign reporting company to file initial BOI reports or update and/or correct previously filed BOI reports to the later of April 25, 2025, or 30 calendar days after its registration “to do business in any State or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of that State or Indian tribe.”
Key Takeaways
For the on-again, off-again saga that is the BOI reporting under the CTA, applicable reporting by foreign companies is “on”; whereas, reporting by U.S. companies as well as BOI of U.S. persons is “off.” The new deadline to file initial BOI reports or update and/or correct previously filed reports is April 25, 2025, (or if later, 30 days after registration to do business in the U.S.).
PYA’s International Tax consultants help clients navigate complex international laws. If you have questions about the Corporate Transparency Act or any matter regarding international tax, our executives are happy to help.
