What Changed
1. FinCEN’s February 27 Notice
FinCEN stated it will not issue penalties or pursue enforcement against companies that fail to file or update their Beneficial Ownership Information (BOI) by March 21, 2025. It also committed to releasing an interim final rule by that same date.
2. Treasury’s March 2 Statement
The Treasury supported FinCEN’s move and clarified that it would not enforce the CTA against U.S. persons or domestic entities, regardless of any rule changes. The Treasury also announced a proposed rule that would limit the scope of the CTA to foreign reporting companies only.
Domestic reporting companies are those created in the U.S. under state or tribal law. Foreign reporting companies are formed abroad but registered to do business in the U.S.
Implications
For Domestic Entities and U.S. Persons: If you are a U.S.-formed company or a U.S. individual who qualifies as a beneficial owner of such an entity, you’re currently not required to comply with BOI reporting. Filing is still allowed, but it’s now optional. There are no penalties for choosing not to file at this point.
For Foreign Reporting Companies: If your business was formed outside the U.S. but is registered here, you are still required to comply with BOI rules. Most foreign companies must file by April 25, 2025, or within 30 days of registration if created after March 26, 2025.
What’s Next
Interim Final Rule: FinCEN issued an interim final rule that formally exempts U.S.-formed entities and U.S. persons from BOI reporting obligations. This change means that only foreign-related entities now fall under the “reporting companies” category.
Public Comment Period: There is a 60-day window for public comment on whether domestic companies and individuals should continue to be exempt. The final rule is expected later in the year.
Legal and Legislative Watch: Several legal challenges to the CTA are ongoing. At the same time, some lawmakers are calling for the law to be amended or repealed altogether. The Treasury maintains that limited enforcement is the right approach for now.
Why It Matters
Compliance Uncertainty: Even though enforcement is paused, the CTA has not been repealed. Businesses still need to stay updated on the situation. Depending on future policy changes, voluntary filing may be the safer bet.
Legal Risks for Foreign Entities: Foreign businesses that miss deadlines could still face penalties or fines. The rules remain in effect for them, and delays could be costly.
Anti-Illicit Finance Concerns: Advocates for financial transparency argue that excluding U.S.-formed entities from BOI reporting could weaken efforts to prevent the misuse of shell companies for illegal activity.
Key dates to keep in mind:
- February 27, 2025 – FinCEN suspends enforcement and announces it will issue an interim rule by March 21
- March 2, 2025 – The Treasury confirms that U.S. persons and domestic entities are not subject to CTA enforcement
- March 21, 2025 – This was the extended deadline for BOI filing before enforcement was paused
- March 26, 2025 – FinCEN publishes the interim final rule that formalizes exemptions for domestic entities
- April 25, 2025 – Deadline for foreign companies that registered before March 26 to submit BOI filings.
Within 30 days of registration – Deadline for foreign companies created after March 26
A domestic reporting company is an entity formed under U.S. state or tribal law. A foreign reporting company is an entity formed under foreign law that is registered to do business in the U.S.
If you are a U.S. company or a U.S. beneficial owner, you’re off the hook for now. But if your company was formed outside the U.S. and is registered here, you still need to comply. Keep an eye on the rule-making process. Things could change again before the year ends.
