U.S. M&A Newsletter — March 31, 2025
Corporate Transparency Act Only Applies to Non-U.S. Companies?
On March 21, 2025, the U.S. Department of the Treasury and the Financial Crimes Enforcement Network (“FinCEN”) issued an interim final rule that eliminates the requirement for U.S. companies and U.S. persons to submit their beneficial ownership information reports (“BOIRs”) to FinCEN under the Corporate Transparency Act’s (“CTA”) implementing regulations. Under the interim final rule, the definition of a “reporting company” now exclusively means companies that were formed under the laws of a foreign country that have registered to do business in the U.S. Previously, the definition included companies formed in the United States. As such, under the interim final rule all U.S.-based entities and their beneficial owners are exempt from filing BOIRs with FinCEN.
Under the interim final rule, foreign reporting companies must still file BOIRs, but they are not required to disclose information on U.S. persons who are beneficial owners of the foreign reporting company. Additionally, U.S. persons who are beneficial owners are not obligated to provide their information to foreign reporting companies for BOIR purposes. FinCEN also has clarified that they will not impose any BOIR-related penalties or fines against U.S. citizens, U.S. companies, or their beneficial owners. The interim final rule went into effect on March 26, 2025, when it was published in the Federal Register. Foreign reporting companies will have 30 days from March 26, 2025, to file initial BOIRs or to update previously filed BOIRs if required.
The enforcement of the CTA continues to face ongoing litigation. With the implementation of the interim final rule, it is unclear if these ongoing suits will continue as many anticipate the interim final rule will resolve most of these suits.
Given these recent updates, we advise foreign companies to prepare their BOIRs for filing by the new deadline and remain vigilant for updates from FinCEN. Any U.S. companies that have already made their filings should keep records of such filings. However, U.S. companies no longer have any obligation to update existing filings or make new BOIR filings.
In Other News
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