US Beneficial Ownership Information Reporting: What Foreign Companies Must Know After FinCEN's 2025 Rule Change

The Corporate Transparency Act (CTA), enacted in January 2021 as part of the National Defense Authorization Act for Fiscal Year 2021, created a federal beneficial ownership reporting regime administered by the Financial Crimes Enforcement Network (FinCEN). The original rule, which took effect on 1 January 2024, required millions of US and foreign entities to report the identities of their beneficial owners to FinCEN's new database. The stated purpose was to combat money laundering, terrorist financing, tax evasion, and other illicit activity facilitated by anonymous shell companies.

Then, in March 2025, FinCEN published an interim final rule that fundamentally changed the scope of the regime. All entities created in the United States, and all US persons who are beneficial owners of any reporting company, were exempted from the requirement. The obligation now falls exclusively on foreign reporting companies: entities formed under the laws of a foreign country that have registered to do business in any US state or tribal jurisdiction.

This article explains the current state of the law, who must file, what information must be reported, the deadlines, and the penalties for non-compliance.

Background: The Corporate Transparency Act

Before the CTA, the United States had no federal requirement for companies to disclose their beneficial owners at the time of formation or registration. State-level incorporation was (and remains) a matter of filing articles of incorporation or organisation with the relevant secretary of state, and most states did not require disclosure of the natural persons who ultimately owned or controlled the entity. This made the US an attractive jurisdiction for those seeking to hide behind opaque corporate structures.

The CTA addressed this gap by requiring "reporting companies" to file beneficial ownership information (BOI) reports with FinCEN. A reporting company was defined as any corporation, limited liability company, or other entity created by filing a document with a secretary of state or similar office under the law of a state or Indian tribe, or any entity formed under the law of a foreign country and registered to do business in any US state or tribal jurisdiction. Certain categories of entities were exempt, including publicly traded companies, banks, credit unions, insurance companies, tax-exempt entities, and "large operating companies" (those with more than 20 full-time employees, over $5 million in gross receipts reported on the previous year's tax return, and an operating presence at a physical office in the United States).

The March 2025 Interim Final Rule: US Companies Exempted

On 26 March 2025, FinCEN published an interim final rule in the Federal Register that removed the reporting obligation for all "domestic reporting companies" and their beneficial owners. The rule also removed the requirement for foreign reporting companies to report any US persons as beneficial owners. In effect, the only entities now required to file BOI reports are foreign-formed entities registered to do business in a US state or tribal jurisdiction, and even those entities need only report their non-US beneficial owners.

FinCEN stated that the rule change was made in response to Executive Order 14154, which directed the Treasury Department to assess the CTA's regulatory burden and to ensure that law-abiding small businesses were not subjected to unnecessary compliance costs. The agency acknowledged that the vast majority of the original reporting population consisted of small domestic companies, and that the costs of compliance for those entities outweighed the law enforcement benefits.

The interim final rule is open for public comment, and FinCEN has indicated that it intends to finalise the rule. Until the final rule is published, the interim rule is in effect and binding.

Who Must File Under the Current Rule?

The reporting obligation now applies only to "foreign reporting companies." A foreign reporting company is an entity that meets all of the following criteria: it was formed under the laws of a foreign country; it has registered to do business in any US state or tribal jurisdiction by filing a document with a secretary of state or similar office; and it does not qualify for any of the 23 exemptions listed in the CTA (large operating company, publicly traded company, regulated financial institution, etc.).

If a foreign entity does business in the United States but has not formally registered with any state, it is not a reporting company under the CTA. Similarly, a foreign entity that once registered but has since withdrawn its registration is no longer subject to the filing requirement (though it should confirm that its withdrawal was properly recorded).

Practical examples of entities that must file include: a UK limited company registered as a foreign LLC in Delaware; a Pakistani private limited company registered to do business in Wisconsin; a Canadian corporation registered in New York to operate a branch office; and a UAE free zone company registered in Texas for real estate investment purposes.

What Information Must Be Reported?

A foreign reporting company must report two categories of information: company information and beneficial owner information.

The company information includes: the entity's full legal name and any trade names or "doing business as" names; the address of its principal place of business (if the principal place of business is outside the United States, the entity must provide the address of the primary location in the United States where it conducts business); the jurisdiction of formation (i.e., the foreign country under whose laws the entity was formed); and the state or tribal jurisdiction where it first registered and its registration number.

The beneficial owner information includes, for each beneficial owner who is not a US person: the individual's full legal name; date of birth; current residential address; and an identifying number from a non-expired passport, government-issued identification document, or a FinCEN identifier (if the individual has previously obtained one). A copy of the identification document must also be uploaded.

A "beneficial owner" is any individual who, directly or indirectly, exercises substantial control over the entity or owns or controls at least 25% of the ownership interests of the entity. Substantial control includes serving as a senior officer, having authority over the appointment or removal of any senior officer or a majority of the board, or having any other form of substantial control over the entity.

Filing Deadlines

The deadlines depend on when the foreign reporting company registered to do business in the United States. Entities that registered before 26 March 2025 (the publication date of the interim final rule) were originally given 30 days from that date to file, placing the deadline at 25 April 2025. FinCEN subsequently extended deadlines in certain circumstances, and companies should check the FinCEN BOI FAQ page for the most current deadline information.

Entities that register to do business on or after 26 March 2025 must file their initial BOI report within 30 calendar days of receiving notice that their registration is effective.

If any previously reported information changes (for example, a beneficial owner's address or name changes, or a new beneficial owner acquires a 25% or greater interest), the entity must file an updated report within 30 calendar days of the change. If the entity discovers that a previously filed report was inaccurate, it must file a corrected report within 30 calendar days of the date the inaccuracy was discovered or should have been discovered.

Penalties for Non-Compliance

The CTA provides for both civil and criminal penalties. A person who willfully provides false or fraudulent beneficial ownership information to FinCEN, or who willfully fails to report complete or updated information, may be subject to a civil penalty of up to $591 per day for each day the violation continues (the amount is adjusted annually for inflation). Criminal penalties include a fine of up to $10,000 and imprisonment of up to two years.

The term "person" in this context includes any individual who causes a reporting company to fail to comply. This means that directors, officers, and agents of a foreign reporting company who are responsible for the company's US compliance obligations could face personal liability if the company fails to file or files inaccurate information.

There is a safe harbour for voluntarily corrected reports. If a person files an inaccurate report but corrects it within 90 days of the original filing deadline, no penalties will be imposed, provided the original inaccuracy was not made with an intent to evade the reporting requirements.

Practical Compliance Steps

For foreign companies currently registered to do business in a US state, the immediate priority is to determine whether you have already filed a BOI report. If you filed under the original rule before March 2025, your report is on file and no further action is required unless your beneficial ownership information has changed. If you have not yet filed, you should do so promptly through FinCEN's electronic filing system at boiefiling.fincen.gov.

Before filing, identify all individuals who exercise substantial control over the entity or who own or control 25% or more of its ownership interests. Remember that under the revised rule, you need only report non-US person beneficial owners. Gather the required identification documents for each reportable beneficial owner.

Consider whether your entity qualifies for any of the 23 exemptions. The large operating company exemption, in particular, is worth examining: if your US operations employ more than 20 full-time employees, generated more than $5 million in gross receipts or sales on the prior year's US tax return, and have an operating presence at a physical office in the United States, you may be exempt.

Finally, establish an internal process for monitoring changes. Any change in beneficial ownership, or any change in the previously reported information (name, address, identification details), triggers a 30-day update obligation. Failure to file timely updates carries the same penalties as failure to file the initial report.

Relevance for Pakistani, UK, and EU Businesses

For Pakistani businesses with US operations, the BOI reporting requirement is directly relevant if the Pakistani entity has registered as a foreign corporation or LLC in any US state. This is increasingly common for IT services companies, textile exporters with US distribution arms, and real estate investors. The requirement applies regardless of the size of the US operations: there is no de minimis threshold for foreign reporting companies (unlike the large operating company exemption, which applies only to entities with a physical US office, 20-plus employees, and $5 million in gross receipts).

For UK companies, the situation is similar. A UK limited company registered as a foreign entity in, say, Delaware or New York to operate a US subsidiary must file a BOI report disclosing its non-US beneficial owners. UK individuals who are beneficial owners of such an entity must be reported with their passport or driving licence details.

EU companies face the additional consideration that their home jurisdictions already require beneficial ownership disclosure under the EU Anti-Money Laundering Directives. However, the US and EU regimes are separate, and compliance with one does not satisfy the other. An EU company registered to do business in the US must file with both its national beneficial ownership register and FinCEN.