FinCEN Drops Corporate Transparency Rules for US Companies & Persons

In a significant policy shift, the Financial Crimes Enforcement Network (FinCEN) has issued an interim final rule that eliminates the obligation for companies and individuals formed or residing in the United States to report beneficial ownership information (BOI). This move, announced in alignment with the US Department of the Treasury’s 2 March 2025 statement, marks a major change in the implementation of the Corporate Transparency Act (CTA).

The updated rule narrows the definition of a “reporting company” to apply solely to entities formed under foreign laws that are registered to do business in a US state or Tribal jurisdiction. These entities, previously labelled “foreign reporting companies”, are now the only group required to report BOI to FinCEN — and only if they do not meet exemption criteria.

Entities formed within the US, including all previously classified “domestic reporting companies”, are now fully exempt from reporting beneficial ownership. Additionally, no US person will be required to report BOI in connection with a foreign reporting company, even if they are a beneficial owner of that entity.

This regulatory retreat significantly reduces compliance burdens for US-based businesses and individuals, potentially streamlining corporate operations and legal obligations. However, it raises questions over the effectiveness of anti-money laundering efforts and financial transparency, particularly given the original intent of the CTA to combat illicit finance through greater ownership visibility.

Foreign entities that now fall under the refined scope of the regulation must adhere to new BOI reporting deadlines.

This latest move underscores a pivotal recalibration of US transparency policy, one that could have far-reaching consequences for financial crime prevention and global corporate governance.

Read the announcement here.

Read the interim final rule here.