The Financial Crimes Enforcement Network (FinCEN) announced on March 26, 2025, that all United States companies and individuals are now exempt from submitting beneficial ownership information (BOI) reports. Under the new rule, only foreign companies operating in the U.S. are required to report.
As a small business owner, understanding what this means for your company is crucial to staying compliant with federal law.
What this change means for small business and startup owners
Before the interim final rule was released, FinCEN considered both domestic and foreign entities as “reporting companies”. It defined “reporting company” with two categories.
A “domestic reporting company” referred to small businesses, limited liability companies or any entity that an owner has created via filing with a secretary of state or any similar office in the U.S. Meanwhile, a “foreign reporting company” referred to a foreign entity that an owner formed under the law of their respective country and registered to operate in the U.S. via filing with a secretary of state or any similar office in the U.S.
However, the new ruling has changed this definition by exempting all domestic businesses from BOI reporting. Instead of two categories, the Corporate Transparency Act (CTA) now recognizes “reporting company” as any foreign business entity operating in the country.
Additionally, U.S. citizens who are beneficial owners of a foreign company do not need to submit a BOI report. Likewise, foreign entities should no longer report any U.S. citizen as beneficial owners.
How the new BOI reporting rule affects small businesses and startups
If you have a small business or startup that qualifies as a foreign reporting company, you must file a BOI report. FinCEN has released new deadlines for submission that you must follow:
- For businesses registered in the U.S. before March 26, 2025, you must submit BOI reports by April 25, 2025.
- For businesses registered in the U.S. on or after March 26, 2025, you must file an initial BOI report 30 days after receiving notice that your registration is effective.
While the rule change and deadlines are in effect, the bureau has yet to update its guidelines on BOI reporting for foreign small businesses. Seeking legal advice from a business attorney can provide direction on your BOI reporting requirements and help in maintaining compliance.