Legal Requirements
Updates to the BOI Reporting Requirements
The landscape of business ownership reporting in the U.S. continues to shift, with recent changes affecting compliance obligations for many companies. For businesses navigating these regulations, understanding the latest developments is crucial to ensure they remain informed and prepared for any future shifts.
Treasury Department’s Announcement on BOI Reporting Requirements
On March 20, 2025, the U.S. Department of the Treasury announced a significant shift in the enforcement of the Corporate Transparency Act (CTA), particularly concerning Beneficial Ownership Information (BOI) reporting requirements. This update has important implications for businesses, especially U.S.-based entities and their beneficial owners. While BOI reporting requirements remain on the books, the Treasury Department has made it clear that there will be no enforcement of these requirements for U.S. companies, marking a notable departure from prior expectations.
Previously, BOI reporting was largely voluntary, with the understanding that mandatory compliance and enforcement would be implemented at a later date. The new announcement changes this by explicitly stating that while reporting is still required, there will be no penalties or fines for non-compliance. The Treasury’s decision aligns with broader efforts to reduce regulatory burdens on American businesses, particularly small and mid-sized enterprises that would have faced compliance challenges.
Key Changes: Exemption for U.S. Entities
One of the major changes under the new policy is the exemption for U.S. entities. Domestic reporting companies—those created within the United States—are no longer required to submit BOI reports to the Financial Crimes Enforcement Network (FinCEN). However, foreign entities that are registered to do business in any U.S. state or tribal jurisdiction are still subject to the reporting requirement. These foreign reporting companies must disclose their beneficial ownership details to FinCEN, though U.S. persons who own or control such entities are not required to provide additional information regarding their ownership.
Despite this temporary relief from enforcement, businesses should remain vigilant. The lack of penalties does not mean the requirement has been eliminated entirely, and future policy changes could reinstate enforcement mechanisms. It remains possible that FinCEN and the Treasury Department could implement stricter regulations or reverse course on enforcement at a later date. Businesses should continue monitoring regulatory developments to ensure they remain in compliance should the situation change.
Conclusion
We recommend staying informed and prepared for potential shifts in BOI reporting requirements. If you operate a foreign entity registered in the U.S., it is essential to ensure compliance with the current regulations. @VirtualCounsel is prepared to assist you in evaluating how these changes impact your business and to help you stay ahead of any potential updates. Contact us if you have any questions or need assistance in navigating these changes.
‍
‍
The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.