FinCEN Ends Requirement of Beneficial Ownership Information Reports for U.S. Persons
FinCEN Ends Requirement of Beneficial Ownership Information Reports for U.S. Persons
After several years of uncertainty, the Financial Crimes Enforcement Network of the United States Treasury (FinCEN) has issued a final rule that exempts United States Persons[1] from the requirement of filing Beneficial Ownership Information (BOI) reports or providing information for such a filing. BOI reports were required to be filed by most U.S. companies under the Corporate Transparency Act (CTA), which was enacted by Congress in 2021 to rein in international money laundering through shell companies in the U.S. by requiring reports disclosing who beneficially owned them. This final rule abolishes any obligation of U.S. entities from filing BOI reports and of United States Persons from having to report their beneficial ownerships. The only required filers now are foreign entities (such as a German GmbH or an Italian S.p.A.) that choose to directly qualify to do business in the U.S. by registering with a state (for example, with the Delaware Secretary of State) and even then, only with respect to its foreign beneficial owners.
FinCEN’s final rule, which became effective on August 14, 2026, exempts companies formed in other countries but authorized to do business in the United States (“reporting companies”) from reporting the beneficial ownership information of any United States Persons or people who helped a company to file a BOI report (“company applicants”) and exempts United States Persons from the obligation to provide beneficial ownership information with respect to any reporting company for which they are beneficial owners or company applicants. It also provides that there is no obligation to update information regarding United States Persons in BOI reports. Reporting companies are still required to file BOI reports to disclose foreign individual beneficial owners.
The first BOI reports were required to be filed by January 1, 2025. Several lawsuits were brought across the country to stop the requirement. For months in 2024 and early 2025, competing court decisions led to great confusion as to the need to comply with the BOI report requirements. On March 26, 2025, FinCEN issued an interim final rule that eliminated the requirement that United States Persons file BOI reports. The final rule adopts the interim final rule with a few changes.
United States Persons do not need to take any further action in connection with BOI reports. Moreover, in its release of the final rule, FinCEN stated that it will endeavor to delete all information of United States Persons in the BOI reports that were filed on or before February 10, 2027.
New York State enacted the New York LLC Transparency Act, a statute similar to the CTA, that went into effect on January 1, 2026. However, similar to the CTA, its coverage was significantly limited so that any entity formed in a United States state is now exempt from reporting; the New York LLC Transparency Act only applies to foreign LLCs authorized to do business in New York.
If you have any questions regarding the impact of this change on you or your company, please contact one of our Business & Finance attorneys.
[1] “United States Persons” is defined in Section 7701(a)(30) of the Internal Revenue Code as follows:
The term “United States person” means—
(A)a citizen or resident of the United States,
(B)a domestic partnership [which includes a multi-member limited partnership under the IRC],
(C)a domestic corporation,
(D)any estate (other than a foreign estate, within the meaning of paragraph (31)), and
(E)any trust if—
(i)a court within the United States is able to exercise primary supervision over the administration of the trust, and
(ii)one or more United States persons have the authority to control all substantial decisions of the trust.