The CTA lives on . . . barely.
As anticipated, on March 26, 2025, the Financial Crimes Enforcement Network (FinCEN) published an interim final rule that significantly narrows the scope of the Corporate Transparency Act (CTA) to foreign owners of foreign companies, leaving domestic reporting companies and U.S. persons spared from further action under the CTA.
On March 2, 2025, the Treasury Department had announced the suspension of the enforcement of the CTA against U.S. citizens and domestic reporting companies along with its plans to remove the requirement for U.S. companies and U.S. citizens to report beneficial ownership information (BOI) to FinCEN under the CTA. Accordingly, many U.S. companies and U.S. citizens were in a standstill until the Treasury Department released the interim final rule.
On March 26, 2025, FinCEN published an interim final rule in the Federal Register that (1) revises the definition of a reporting company to cover only those entities formed under the law of a foreign country and that have registered do business in any U.S. State, and (2) exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.
Foreign entities that meet the new definition of a “reporting company” and do not otherwise qualify under an exemption, must report their BOI to FinCEN under new deadlines. Nonetheless, these foreign entities will not be required to report any U.S. persons as beneficial owners and U.S. persons will not be required to report BOI for any such foreign entity, marking a near complete gutting of the CTA.
Reporting companies registered to do business in the United States before March 26, 2025 must file BOI reports no later than 30 days from that date, while reporting companies registered to do business in the United States on or after March 26, 2025 have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.
The interim final rule is subject to a 60-day comment period. It is expected that a final rule will be issued following the comment period and that “[c]omments submitted . . . will be considered and addressed . . . if warranted . . . .” At the moment, there is no guidance on when the final rule is expected.
Our advice to domestic reporting companies and U.S. persons continues to be to pause all preparatory efforts related to the CTA, while foreign reporting companies and their foreign beneficial owners should prepare to make a BOI filing under the new deadlines.
We are available to provide assistance as needed. Please consult your Shulman Rogers contact or any of our lawyers listed below should you have any questions.
