CTA update: FinCEN revises beneficial ownership information reporting requirements and extends deadlines

On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule (IFR) significantly revising the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA). The IFR exempts domestic entities,[1] certain foreign reporting companies,[2] and US persons[3] from filing BOI reports and extends the deadlines for compliance for foreign reporting companies.

Key changes in the interim final rule

The IFR changes several key provisions of the CTA:

1. Exemption for domestic entities: Domestic entities are now exempt from the BOI reporting requirements. They are no longer included in the definition of a reporting company, and therefore no longer need to file initial BOI reports or update or correct previously filed BOI reports with FinCEN.
   
   
2. Exemption for US persons: Foreign reporting companies are exempt from reporting the BOI of any US persons who are beneficial owners. Similarly, US persons are exempt from providing their BOI to any foreign reporting company for which they are a beneficial owner.
   
   
3. Special rule for foreign pooled investment vehicles: Foreign pooled investment vehicles are exempt from reporting the BOI of US persons who exercise substantial control over the entity. If no non-US person has substantial control, the entity is not required to report any beneficial owners.
   
   
4. Extended deadlines for foreign reporting companies: For foreign reporting companies registered in a US State or Tribal jurisdiction before the IFR’s publication, the deadline for filing initial BOI reports, or updating or correcting previously filed BOI reports, has been extended to April 25, 2025 (30 days from the date of the rule’s March 26, 2025 publication in the Federal Register).

Context for the interim final rule

The revisions to the BOI reporting requirements come in the wake of significant litigation challenging the CTA. Two key cases, Texas Top Cop Shop, Inc. v. Bondi and Smith v. U.S. Department of the Treasury, resulted in preliminary injunctions that prevented FinCEN from enforcing the CTA and its implementing regulations. These injunctions were later stayed, allowing FinCEN to proceed with implementing the CTA but necessitating adjustments to the reporting deadlines. For more on litigation over the CTA, please see our prior alert.

The IFR reflects the government’s determination to balance regulatory compliance burdens with the need for BOI reports that would support national security and law enforcement efforts. Specifically, the government states that the “vast majority of domestic small businesses are legitimate and owned by hard-working American taxpayers who are not engaged in illicit activity” and that requiring BOI from domestic reporting companies would not serve the public interest or be highly useful for national security or law enforcement purposes; the government therefore exempted domestic reporting companies from the BOI reporting requirements. Similar considerations underly the exemption for US persons who are beneficial owners of foreign reporting companies.

By contrast, the BOI requirements remain in place for foreign reporting companies (excluding US persons), due to the heightened national security and illicit finance risks associated with foreign ownership or control, such as the use of shell companies. Additionally, the government determined that because foreign companies must, in any event, submit documentation to do business in the United States, maintaining this requirement presented fewer concerns of increased regulatory burden.

Implications for businesses

The interim rule states that it is “effective immediately upon publication in the Federal Register.” Under the rule, domestic reporting companies, US persons, and certain foreign investment vehicles exclusively subject to substantial control by US persons are now exempt from the requirements of the CTA. For reporting companies that are still subject to the CTA, FinCEN has extended the reporting deadlines: Reporting companies that were registered to do business in a US State or Tribal jurisdiction before March 26, 2025, while companies that register after March 26, 2025 must file BOI reports within 30 days of learning that their registration is effective.

It is possible that there will be further changes to the CTA compliance landscape, as Congress may decide to extend the reporting deadline further (a resolution in the US House of Representatives to change the deadline to January 1, 2026 passed unanimously but has yet to be voted upon by the US Senate). FinCEN is also accepting comments on this interim rule and intends to issue a final rule later this year that could result in further changes or extensions.

Next steps

Reporting companies that are still subject to the BOI reporting requirements should proceed with preparing the necessary filings. DLA Piper’s CTA working group will continue to closely monitor all updates relating to the CTA, including the publication of the IFR to the Federal Register, and is available to assist with questions regarding BOI reports.

For additional guidance regarding the CTA or related state requirements, please contact your DLA Piper relationship partner or any of the authors.

^{[1] A domestic entity is “a corporation; a limited liability company; or other entity that is 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.” 31 CFR § 1010.380(c)(1)(i).
[2] A foreign reporting company is “a corporation, limited liability company, or other entity that is formed under the law of a foreign country and that is registered to do business in the United States by the filing of a document with a secretary of state or equivalent office under the law of a state or Indian tribe.” 31 CFR § 1010.380(c)(1)(ii).
[3] A US person is defined by the CTA as anyone who is a citizen or resident of the United States, as well as domestic partnerships, corporations, estates or trusts. 31 USC § 5336(a)(14); 26 USC § 7701(a)(30). A foreign person is anyone who is not a US person. 31 USC § 5336(a)(7).}