Key Takeaways:
- U.S. entities are exempt from the reporting requirements of the CTA.
- U.S. entities are not required to update or correct BOI previously reported to FinCEN.
- With limited exceptions, the existing reporting requirements of foreign entities registered to do business in the U.S. are unchanged.
- Foreign entities are exempt from reporting BOI of U.S. persons[1] and U.S. persons are not required to provide BOI to foreign entities.
- The filing deadline for foreign entities has been extended by 30 days.
It appears that the months of uncertainty regarding the future of the beneficial ownership information (“BOI”) reporting requirements under the Corporate Transparency Act and its regulations and reporting rules (“CTA”) are coming to an end. On Friday, March 21st, the U.S. Treasury Department’s Financial Crimes Enforcement Network (”FinCEN”) published an interim final rule ending the requirement for U.S. entities to file new BOI reports or update or correct BOI reports previously filed with FinCEN. The interim final rule adds a new category of entities that are excluded from the definition of “reporting companies” under the CTA which includes U.S. corporations, LLCs, and other U.S. entities.
With limited exceptions, the interim final rule does not change the reporting requirements for foreign entities registered to do business in the U.S. (“foreign reporting companies”). The interim final rule exempts foreign reporting companies from the requirement to include U.S. persons in their BOI reports and U.S. persons are not required to provide BOI to foreign reporting companies. The new interim final rule extends the deadline for foreign reporting companies to file initial BOI reports, and to update or correct previously filed BOI reports, to 30 days from the date of publication of the new interim final rule to give foreign reporting companies additional time to comply.
Foreign pooled investment vehicles are exempted under the new interim final rule from reporting US persons who exercise substantial control. If more than one individual exercises substantial control over the foreign pooled investment vehicle 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 pooled investment vehicle. If there is no individual with substantial control who is not a U.S. person, the foreign pooled investment vehicle is not required to report any beneficial owners.
[1] “United States person” has the meaning given the term in section 7701(a)(30) of the Internal Revenue Code of 1986.
This update is intended to bring recent CTA developments to your attention and is provided for informational purposes only and does not serve to replace professional legal advice.
