FinCEN Finalizes Rule Eliminating Beneficial Ownership Reporting Requirements for U.S. Companies and | White Collar Law and Investigations

What to Know

• FinCEN’s final rule makes permanent the March 2025 changes that removed beneficial ownership information (“BOI”) reporting obligations for U.S. companies and U.S. persons under the Corporate Transparency Act (“CTA”). The rule preserves targeted reporting for certain foreign entities.
• Foreign entities must report certain (non-U.S.) beneficial ownership information within 30 days after receiving notice that their registration is effective.
• This blanket exemption approach potentially creates a gap allowing foreign entities to evade reporting requirements by forming an entity in the United States, though these entities will still be subject to other forms of scrutiny. 
• The Final Rule does not preempt state law and companies should ensure compliance with applicable state-level filing requirements.
• FinCEN will delete previously submitted BOI reported by U.S. persons from its database.

The Final Rule Makes the Interim Rule Permanent 
On August 11, 2026, FinCEN issued a final rule (“Final Rule” or the “Rule”) adopting, with certain limited changes, FinCEN’s March 26, 2025 interim final rule (“IFR”), which narrowed beneficial ownership information (“BOI”) reporting requirements under the Corporate Transparency Act (“CTA”).¹  The Final Rule continues the IFR’s removal of BOI reporting requirements for U.S. companies and U.S. persons and continues to exempt “domestic reporting companies” from BOI reporting requirements.² Foley Hoag discussed these changes in an earlier article.³

Changes from the Interim Final Rule

The Final Rule makes two substantive changes beyond the interim final rule. 

First, it exempts foreign companies from reporting U.S. person “company applicants”—the individuals who helped those companies register to do business in the United States. FinCEN made this change in response to comments noting that the IFR retained the requirement from the Reporting Rule for certain reporting companies to report information about their company applicants. A foreign entity first registered in the U.S. still had to report any U.S. person who qualified as the foreign entity’s company applicant, even though it would not have to report U.S. person beneficial owners. 

Second, the Final Rule exempts U.S. persons who applied for FinCEN identifiers (“FinCEN IDs”) from having to update or correct information they previously provided to FinCEN. The Final Rule reflects that “any relief from the requirement to update FinCEN IDs should extend to U.S. persons obtaining FinCEN IDs to use in place of reporting company applicant BOI, as well as U.S. persons obtaining FinCEN IDs to use in place of reporting beneficial owner BOI.”⁴  The IFR already changed the definition of “reporting company” to exclude domestic legal entities. The Final Rule added this exemption to improve fairness and consistency as the same information is no longer required to be reported about them as beneficial owners and reporting companies but under the IFR they were required to report BOI in their capacity as FinCEN ID holders.  As the Final Rule eliminates all requirements for reports about U.S. persons—beneficial owners, company applicants, and legal entities alike—FinCEN concluded that there is no longer a justification for imposing the requirement on U.S. person FinCEN ID holders to update or correct the information associated with their FinCEN IDs.⁵

Foreign Entities Must Still Report Certain BOI

The definition of “reporting company” now means only (a) a corporation, LLC, or other entity; (b) formed under the law of a foreign country; and (c) registered to do business in any U.S. state or tribal jurisdiction by filing a document with a secretary of state or similar office.⁶ Foreign entities meeting this definition must report BOI within 30 calendar days after receiving notice that their registration is effective, but are not required to report any U.S. persons as beneficial owners.

This regulatory framework creates a potential gap. As commenters on the rule flagged, the Final Rule turns on where the entity was formed, not who ultimately owns or controls it, potentially enabling foreign persons to evade reporting requirements by forming an entity in the United States. Treasury acknowledged the concern but, on a benefit-to-burden basis, was not persuaded that targeted carve-outs (such as requiring reporting from domestic shell companies with foreign ownership) would be more effective. The Final Rule therefore, “adopt[ed] the blanket exemption approach” for all domestic entities. Treasury highlighted several rationales for accepting this risk, including risk mitigation from financial institutions’ continuing obligations under the Customer Due Diligence rule, existing investigative frameworks from the pre-CTA era, and the determination by the Secretary that the exemption serves the public interest.

Deletion of Previously Submitted BOI

FinCEN announced that it will delete previously submitted BOI reported by U.S. persons from its BOI database. FinCEN anticipates working with the National Archives and Records Administration and implementing a process to delete information about any individuals—company applicants, beneficial owners, or FinCEN ID recipients—that FinCEN reasonably believes was provided by a U.S. person. FinCEN does not anticipate requiring U.S. companies or U.S. persons to contact FinCEN to request deletion and will provide public notice on its website when the deletion process is complete.

 

^1. See 91 FR 52508. On January 1, 2021, Congress enacted into law the CTA as part of the broader Anti-Money Laundering Act of 2020.

^2. The original reporting rule defined “domestic reporting companies” as “any corporation, LLC, or other entity created by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe, subject to certain exemptions” and was included under the covered “reporting companies.” See 31 CFR 1010.380(c)(1)(i). The March 26, 2025 interim final rule removed domestic reporting companies from the definition of reporting company. 

^3. See Foley Hoag, Modernizing BSA/AML Compliance: FinCEN’s Proposed Program Rule and Coordinated Federal Rulemakings, July 20, 2026, available here.

^4. 91 FR 52517.

^5. 91 FR 52516.

^6. 31 CFR 1010.380(c)(2). The original Reporting Rule had 23 exemptions: Securities reporting issuer; Governmental authority; Bank; Credit union; Depository institution holding company; Money services business; Broker or dealer in securities; Securities exchange or clearing agency; Other Exchange Act registered entity; Investment company or investment adviser; Venture capital fund adviser; Insurance company; State-licensed insurance producer; Commodity Exchange Act registered entity; Accounting firm; Public utility; Financial market utility; Pooled investment vehicle; Tax-exempt entity; Entity assisting a tax-exempt entity; Large operating company; Subsidiary of certain exempt entities; Inactive entity. A 24th exemption, the “domestic entity” exemption, was added by the IFR and made permanent by the Final Rule.