End of CTA / BOI
The U.S. Government issued the following press release last night (Sunday, March 2, 2025):
Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies
March 2, 2025
The Treasury Department is announcing today that, with respect to the Corporate Transparency Act, not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.
Breaking Down the Announcement
No fines for failure to file, update, or correct a Beneficial Ownership Information Report (BOIR)
U.S. Treasury Department (which FinCEN is part of) will change the implementation regulations for the Corporate Transparency Act (CTA). The CTA allows FinCEN to create exemptions to CTA. It is likely FinCEN will use this power to exempt previously included reporting companies.
FinCEN will require “foreign reporting companies” to continue to file BOIRs.
What Is a Foreign Reporting Company?
A foreign reporting company is any entity that is a corporation, LLC, or other entity that is formed under the law of a non-U.S. country and registered to do business in any U.S. state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a U.S. state or Indian tribe. For example, a non-U.S. company might register a marketing office in the U.S. without creating a U.S. subsidiary.
Under CTA and the current implementing regulations, a “domestic reporting company” does not become a “foreign reporting company” because the U.S. entity is owned by a non-U.S. company or because the Beneficial Owners are non-U.S. individuals.
Future of CTA / BOI
The current U.S. administration wants to reduce the impact of CTA as part of its view that less regulation is better for U.S. business growth. We will monitor the changes made later this year to the CTA implementing regulations. It is possible that the definition of “foreign reporting company” could be made more expansive. However, it seems based on the U.S. Treasury statement and the statements made last night by President Trump their goal is to reduce CTA to an extremely narrow group of companies.
댓글