U.S.-formed Entities Are Exempt from Business Ownership Interest Reports under Corporate Transparency Act

On March 21, 2025, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) adopted an interim final rule that all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners are now exempt from the Corporate Transparency Act (CTA) requirement to report beneficial ownership information (BOI) to FinCEN. 

This interim final rule retains the requirement for foreign reporting companies, and their beneficial owners (excluding U.S. persons), to report their BOI to FinCEN, while extending the deadline for those companies to file initial BOI reports, or update or correct previously filed BOI reports, to April 26, 2025 or 30 days after their registration to do business in the United States, whichever comes later.  Foreign companies are subject to the CTA Reporting Rule only if they register to do business in the United States.  The interim final rule exempts foreign reporting companies from having to report the BOI of any U.S. persons who are beneficial owners of a foreign reporting company

This news is a great relief to U.S. small business.  This announcement follows upon two litigations that enjoined enforcement due to excessive burdens on more than 32 million American-based small businesses.  FinCEN estimated the total aggregate labor costs for reporting companies filing initial BOI reports in the first year of the Reporting Rule to be $21.7 billion and for reporting companies filing initial BOI in future years to be $3.3 billion annually. 

This interim final rule will be subject to comments and possible future changes.

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