FinCEN Rule Excludes Domestic Entities from Beneficial Ownership Reporting

Domestic entities are now excused from beneficial ownership reporting under the Corporate Transparency Act. This is the result of a new Financial Crimes Enforcement Network interim final rule removing “the requirement for U.S. companies and U.S. persons to report beneficial ownership information to FinCEN under the Corporate Transparency Act.” 

According to this new rule, all U.S. based entities and their beneficial owners are exempt from BOI disclosure requirements.  Only foreign entities otherwise meeting the definition of a “reporting company” and not qualifying for any applicable exemption are still required to submit BOI disclosures.  These foreign entities, though, are not “required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.” 

This rule was foreshadowed by an announcement earlier this month that BOI reporting would be limited to foreign entities.

For foreign reporting companies still subject to BOI disclosures, the following deadlines apply (once the interim final rule [IFR] is published): 

• Reporting companies registered to do business in the United States before the date of publication of the IFR must file BOI reports no later than 30 days from that date. 

• Reporting companies registered to do business in the United States on or after the date of publication of the IFR have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective. 

Unstated in this rule is what FinCEN will do with any BOI information already submitted to the government by a U.S. reporting company.  But for now, it appears, going forward, that U.S. based entities and U.S. beneficial owners are now exempt from the CTA and its BOI reporting obligations.