Introduction
The landscape of business compliance in the United States has shifted dramatically with the latest updates to the Financial Crimes Enforcement Network (FinCEN) Beneficial Ownership Information (BOI) reporting requirements. If you own or manage a company, especially one registered in the U.S., these FinCEN BOI changes could significantly affect your reporting obligations. In this blog post, we’ll break down what’s changed, who’s impacted, and what steps you should take next.
What is FinCEN Beneficial Ownership Information Reporting?
FinCEN Beneficial Ownership Information Reporting was introduced under the Corporate Transparency Act (CTA) to combat money laundering and enhance corporate transparency. It required certain companies to disclose information about their beneficial owners: the individuals who ultimately own or control the company.
Key Updates to FinCEN BOI Reporting Requirements
The latest updates, effective March 26, 2025, dramatically reduce the number of entities required to file BOI reports. Understanding these changes can help you avoid unnecessary filings and focus your compliance efforts where they’re truly needed.
U.S. Companies No Longer Required to Report
On March 26, 2025, FinCEN issued a rule that exempts U.S. companies and U.S. persons from BOI reporting requirements. The definition of a “reporting company” now only includes entities formed under foreign law that are registered to do business in the United States.
What Is a “Reporting Company” Now?
As of March 26, 2025, the definition of a “reporting company” under FinCEN’s regulations has been significantly narrowed. A reporting company is now defined as:
Only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or similar office.
This means 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 requirement to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act (CTA).
What Is a “Beneficial Owner” Now?
In general, a beneficial owner is any individual who:
- directly or indirectly exercises “substantial control” over the reporting company, or
- directly or indirectly owns or controls 25 percent or more of the “ownership interests” of the reporting company.
Under the revised rules, reporting companies that are still subject to FinCEN BOI reporting are no longer required to report the beneficial ownership information of any United States persons who are their beneficial owners, and U.S. persons are no longer required to provide beneficial ownership information with respect to any reporting company for which they are a beneficial owner.
Who Still Needs to File?
Foreign Entities: New Definition and Obligations
If your company is a foreign entity registered to do business in the U.S., you are still required to file BOI reports with FinCEN, unless you qualify for a specific exemption.
Exemptions and Who Qualifies
U.S. domestic companies, U.S. persons, and certain foreign entities (such as those already heavily regulated) are exempt from the new BOI reporting requirements.
New Reporting Deadlines for Foreign Companies
Deadlines for Previously Registered Entities
Foreign reporting companies registered before March 26, 2025, must file their BOI reports by April 25, 2025.
Deadlines for Newly Registered Entities
Foreign companies registering on or after March 26, 2025, must file their initial FinCEN BOI report within 30 calendar days of their registration becoming effective.
What Information Must Be Reported?
Required Details for Foreign Reporting Companies
Foreign reporting companies must provide information about their beneficial owners, including names, addresses, dates of birth, and identification numbers.
Changes in Beneficial Owner Disclosure
Importantly, foreign entities no longer need to report any U.S. persons as beneficial owners.
Enforcement and Penalties: What’s Changed?
No More Fines for U.S. Companies
FinCEN has announced that it will not issue fines, penalties, or take enforcement actions against U.S. companies or their beneficial owners for failing to file or update BOI reports.
Disaster Relief Extensions
Companies located in areas affected by recent disasters may receive deadline extensions for BOI reporting, as designated by FinCEN.
Frequently Asked Questions
Do U.S. Persons Need to Report as Beneficial Owners?
No. U.S. persons are exempt from FinCEN BOI reporting, even if they are beneficial owners of a foreign entity.
What If My Company Was About to File?
If you are a U.S. company or U.S. person, you no longer need to file a FinCEN BOI report. Foreign entities should review the new deadlines and requirements.
How Do I Know If I’m Exempt?
If your company was formed in the U.S. or you are a U.S. person, you are exempt. Foreign entities should consult the updated FinCEN guidance or legal counsel.
Action Steps for Businesses
What Should U.S. Companies Do Now?
- Cease preparation of FinCEN BOI reports unless you have foreign registration.
- Monitor for further updates from FinCEN.
- Consult with legal counsel for any unique circumstances.
Checklist for Foreign Reporting Companies
- Confirm if your entity is considered a “reporting company” under the new rules.
- Prepare required beneficial ownership information.
- File your BOI report by the applicable deadline.
If you are uncertain about if you should be filing your Beneficial Ownership Report, feel free to contact us.
