On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule removing the requirement that U.S. companies report their beneficial ownership information (BOI) and exempting foreign reporting companies from reporting information about U.S. persons who are beneficial owners. After months of legal challenges and a recent congressional vote in which the House of Representatives unanimously voted to delay the Corporate Transparency Act's (CTA) deadlines, the BOI Reporting Rule will now focus on foreign entities that are registered to do business in the U.S. and their foreign beneficial owners. Foreign companies have until April 25 to determine whether and what they need to file. Below we discuss the scope of the interim final rule and the broader impact of the revised regulation.

The Interim Final Rule

The interim final rule (1) narrows the focus to foreign reporting companies and (2) exempts U.S. persons from reporting obligations. Under the new rule, only entities previously defined as "foreign reporting companies" must report their BOI pursuant to the CTA. Entities that the earlier BOI rule defined as "domestic reporting companies" are not required to report their BOI, nor must they update BOI information previously reported to FinCEN. A foreign reporting company is an entity that was formed under the laws of a foreign country and is registered to do business in any U.S. state or tribal jurisdiction through the filing of a document with a secretary of state or similar office. Because the interim final rule continues to exempt from reporting all of the entities that were previously exempt, foreign reporting companies that qualify for one of the 23 exemptions created by the prior rule (discussed in more detail here and here) still do not have to report their BOI.

In addition, the interim final rule exempts companies from reporting U.S. persons, meaning that even foreign reporting companies do not need to report beneficial owners who are U.S. persons, although they still must report company information and their non-U.S. beneficial ownership. A U.S. person is a citizen or resident of the U.S., a U.S. partnership, corporation, estate, or a trust if a court within the U.S. exercises primary supervision and a U.S. person has authority over all substantial decisions. The interim final rule does not require foreign pooled investment vehicles to report the BOI of U.S. persons who have substantial control over the vehicle. 

The interim final rule was published in the Federal Register on March 26, 2025, and is open to public comments within 60 days. The new deadline for foreign reporting companies to file their BOI reports with FinCEN is 30 days from the March 26 publication date. 

• The public comment period ends May 27, 2025.
• Foreign reporting companies that registered to do business in the U.S. before March 26, 2025, must file by April 25, 2025.
• Foreign reporting companies that registered to do business in the U.S. on or after March 26, 2025, must file within 30 days of notice that their registration is effective.

Key Takeaways

The change in the rule significantly lowers the number of companies that will need to report their BOI. FinCEN originally estimated that the rule would impact 32.6 million companies, with an additional five million new companies subject to the regulation each year. With the changes to the interim final rule, FinCEN now estimates the rule will impact only 20,000 companies, with 5,000 new reporting companies each year. 

• Targeted enforcement against foreign entities and individuals: The original purpose of the CTA was to assist law enforcement investigations. Congress envisioned a rule that could be used to trace illicit proceeds around the world, stating in the Act that it was the sense of Congress that the U.S. needed to “better enable… law enforcement efforts to counter money laundering, the financing of terrorism, and other illicit activity.” The interim final rule is not drafted to facilitate that goal, since the vast majority of the initially contemplated reporting companies will be exempt from reporting. The new regulations instead have the potential to be used to target foreign entities and individuals. The interim final rule still includes criminal penalties for companies that fail to report or report inaccurate information, but that will only apply to foreign entities with foreign beneficial owners. 
• Integrated customer due diligence rule: The CTA envisioned multiple rulemakings by FinCEN, including a rule establishing what companies must report, a rule regarding access to the BOI data, and a revision to the customer due diligence rule that would consider the enhanced BOI information available to financial institutions from the BOI Reporting Rule. In light of the reduced scope of the interim final rule, any imminent changes to the customer due diligence rule will likely be minimal. 
• Potential pushback from Congress: Days after the Trump administration announced that it would revise the BOI Reporting Rule, Senators Sheldon Whitehouse (D-RI) and Chuck Grassley (R-IA) sent a joint letter to Secretary of the Treasury Scott Bessent asking for an explanation of the change. The letter noted that the Department of the Treasury has authority under the CTA to exclude entities or a class of entities, but only when done through a designated process and where the BOI reports would not serve the public interest and "would not be highly useful in national security, intelligence, and law enforcement agency efforts to detect, prevent, or prosecute money laundering, the financing of terrorism, proliferation finance, serious tax fraud, or other crimes." See William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Pub. L. No. 116-283, §§ 6401-6403, 134 Stat. 3388, 4604-4625, at 4610. The bipartisan letter asked Treasury to provide the legal basis for its rollback and justify its position. The letter may foreshadow yet another legal challenge to the current BOI Reporting Rule. 
• Impact on FATF's assessment: When the Financial Action Task Force (FATF) assessed the U.S. anti-money laundering (AML) framework in 2016, it found the country to have strong AML laws but noted significant gaps, in particular around beneficial ownership reporting. FATF re-rated the U.S. in 2024 after the passage of the CTA and promulgation of the previous final rule, upgrading the U.S. on "[t]ransparency and beneficial ownership of legal persons" from non-compliant to largely compliant. FATF may revisit its evaluation following the recent revisions to the BOI reporting rule. 

For more information, please contact:

Ian A. Herbert, iherbert@milchev.com, 202-626-1496

Leah Moushey, lmoushey@milchev.com, 202-626-5896

Ann Sultan, asultan@milchev.com, 202-626-1474

Peter Kentz, pkentz@milchev.com, 202-626-5891

Previous Miller & Chevalier reporting on the CTA and its legal challenges:

• CTA Reporting Requirements Reinstated with Deadline Set for March 21, February 21, 2025
• Supreme Court Lifts Injunction on Corporate Transparency Act, But FinCEN Pauses BOI Reporting Requirements [UPDATED], January 23, 2025
• Fifth Circuit Reinstates Beneficial Ownership Reporting Deadline – Companies Must Now Report by January 13, 2025, December 24, 2024
• Texas Court Pauses Beneficial Ownership Reporting: Should Companies Pause Their Preparation?, December 12, 2024
• T-Minus 45 Days to Comply with the Beneficial Ownership Information Reporting Rule: Is Your Business Ready?, November 18, 2024
• Six Considerations for Companies as FinCEN's Beneficial Ownership Rule Goes Live, January 25, 2024
• In Second CTA Rulemaking, FinCEN Outlines Access to Beneficial Ownership Database, January 10, 2023
• A (Beneficial) Owners Manual: Staying Compliant in Light of New FinCEN Rule, December 7, 2022
• Practitioners Note the Corporate Transparency Act's Potential, But Caution "Wait and See" on Final Rules, May 23, 2022
• FinCEN Proposed Rule Outlines Beneficial Ownership Reporting Obligations, December 16, 2021
• FinCEN Seeks Comments on Beneficial Ownership Registry, April 15, 2021

The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.

This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.