The guidance U.S. companies have been waiting for after years of ups and downs is finally here. In line with our last update, on March 21, 2025, FinCEN issued an interim final rule exempting U.S. companies and persons from the requirement to report, modify, or correct beneficial ownership information under the Corporate Transparency Act (CTA) by excluding such entities from the scope of the term “reporting company.”
The interim final rule does not change any existing reporting requirements for foreign entities, with limited exceptions. U.S. persons that are beneficial owners of foreign reporting companies will not be required to report any beneficial ownership information. Additionally, foreign pooled investment vehicles are exempt from reporting beneficial ownership information of U.S. persons who exercise substantial control over the entity. If more than one individual exercises substantial control over the entity, and at least one of those individuals is not a U.S. person, the entity must report information with respect to the individual who is not a U.S. person who has “the greatest authority over the strategic management of the entity.” If the foreign pooled investment vehicle does not have any non-U.S. individuals with substantial control, then the entity is not required to report. Any foreign entity required to report under the interim final rule will have an additional 30 days to report from the date of publication.
FinCEN is currently accepting comments to the interim final rule and “will assess the exemptions, as appropriate, in light of those comments and intends to issue a final rule this year.” For now, U.S. reporting companies are formally not required to report and, under the previous announcement, will not be penalized for non-compliance with the prior rule.
McGuireWoods will continue to monitor developments and publish updates as litigation proceeds and new guidance is issued. For questions about the CTA or anti-money laundering compliance generally, including customer due diligence and beneficial ownership rules, contact the authors of this article or another McGuireWoods attorney you work with.