CTA Deadline Approaching for Foreign Reporting Companies

The CTA has been the subject of attack in courts, the January 1, 2025, deadline has been postponed several times, and Congress has before it legislation to repeal the CTA. That roller coaster has been discussed in multiple client alerts and other announcements by our firm and elsewhere. This client alert summarizes the current rules that narrow the focus of the original regulations, and the impending deadline for filing that applies to only a fraction of the originally covered entities.

After review of the situation by the new Trump administration, the 2022 regulations were revised by FinCEN on March 21, 2025. The revisions, contained in the Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension (the “Interim Final Rule” or “IFR”), became effective on March 26. The new rules are potentially subject to change by litigation and legislation, as well as regulatory action.

The IFR provides that:

• Entities created in the United States (including in any state, territory or tribal area in the United States) have no further current obligation to register or file beneficial ownership information under the CTA or to update previously filed information. This same blanket exemption applies to any entity created outside the United States and not registered to do business in the United States or in any state, territory or tribal area in the United States.
• Entities created outside the United States and currently registered to do business, or that hereafter register to do business in the United States, including in any state, territory or tribal area in the United States, if not exempted from compliance with the CTA (each such entity, a “foreign reporting company”), must register and file beneficial ownership information under the CTA or update previously filed information. For foreign reporting companies first registered to do business prior to March 26, 2025, the initial reports are due no later than April 25, 2025, if not previously filed. For previously registered foreign reporting companies, changes in previously reported information since registration generally must be reported on April 25, 2025. Entities first registered on or after April 25, 2025, must make their first filing within 30 days after the earlier receipt of notice that their registration is effective or official public notice of such registration.
• However, no foreign reporting company (or any other entity or person) is obligated to disclose beneficial ownership information relating to U.S. persons (as defined in the Internal Revenue Code). Moreover, no U.S. person is obligated to provide his or her personal information under the CTA. Consequently, foreign reporting companies are exempt from reporting if 100% of their beneficial owners are U.S. persons.
• The CTA also requires disclosure, in the initial filing for a reporting company, of personal information of up to two individuals who participated in the formation or filing of a covered entity (called “company applicants”). Foreign reporting companies first filing their initial report with FinCEN will have to file this information, even if a U.S. person is a company applicant.
• After April 25, 2025, foreign reporting companies will be required to file updated information on beneficial ownership within 30 days after the previously filed information is no longer accurate.

The IFR does not discuss the fate of beneficial ownership information previously filed by or about U.S. persons in the FinCEN registry.

The effect of the IFR on the anticipated number of filings is dramatic. The 2022 CTA regulations projected 32,556,929 initial reports in Year 1 and 6,578,732 updates, and 4,998,468 initial reports and 14,456,452 updates in Year 2. The IFR, in contrast, projects only 11,667 reporting companies per annum, on average.

Filing Procedure for Foreign Reporting Companies
As before, filings of reports under the CTA (“beneficial ownership information reports” or “BOIR”) must be made electronically to a database maintained by FinCEN. Exempt entities do not have to file. Except as provided above, the rules for who is a beneficial owner or company applicant, what is reported and how to file are largely unchanged by the IFR. Certain of the rules relate specifically to foreign reporting companies:

• If a foreign reporting company has not been issued an IRS taxpayer identification number, it may substitute a tax identification number issued by a foreign jurisdiction and the name of such jurisdiction.
• A foreign reporting company must report not only the U.S. jurisdiction in which it has first registered to do business, but also to its jurisdiction of formation.
• If a foreign reporting company’s principal place of business is not in the United States, it can substitute the primary location in the United States in which it conducts business.
• If an individual who is a beneficial owner of or company applicant for a foreign reporting company lacks a U.S. state driver’s license or another identification document issued by a state or local government or tribe, a foreign passport and image therefrom may be substituted.

FinCEN’s Explanation of the IFR
In the IFR, FinCEN explains its rationale for materially reducing the reach of the CTA.

• FinCEN notes that it intends to study comments on the IFR received by a May 27, 2025, deadline and issue the final rule by year’s end, taking the comments into account.
• FinCEN further notes that the CTA allowed FinCEN until January 1, 2026, to fully implement the reporting system, and that FinCEN elected to accelerate the deadlines; FinCEN will issue the final rule by the initial deadline.
• Because the IFR is described as an interim step, FinCEN may be implying that the final rule might restore reporting obligations of U.S. persons—or might not.

For the moment, though, the IFR sets forth the currently binding set of rules for compliance under the CTA.