On August 11, 2026, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a final rule, effective August 14, 2026, that ends the requirement that U.S. companies and U.S. persons report beneficial ownership information (“BOI”) to FinCEN under the Corporate Transparency Act (“CTA”).

Background

The CTA was enacted as part of the broader Anti-Money Laundering Act of 2020 and was designed to combat the misuse of anonymous shell companies for money laundering, terrorist financing, tax fraud, and other illicit activities. Effective January 1, 2024, under FinCEN’s regulations implementing the CTA (the “Reporting Rule”), many entities operating in the U.S. were required to report to FinCEN information about the individuals who directly or indirectly owned or controlled them by filing an initial BOI report and to keep the reported information up to date, which placed a significant administrative burden on those entities. FinCEN estimated the total aggregate labor costs for reporting companies filing their initial BOI reports in the first year of the Reporting Rule to be $21.7 billion.

Following widespread criticism and litigation challenging the CTA, FinCEN issued an interim final rule on March 21, 2025 (effective March 26, 2025), that significantly narrowed the scope of the CTA’s reporting requirements. Domestic entities were exempt from the requirement to report BOI, while foreign entities registered to do business in any U.S. state or tribal jurisdiction remained required to disclose their BOI (unless another exemption applied).

Key Changes

The final rule issued on August 11, 2026, adopts as final, with limited changes, the interim final rule and provides for the following changes to the CTA reporting requirements:

• Domestic Entity Exemption - All entities created under U.S. law are exempt from the requirement to report BOI, including initial filings, updates, and corrections;
• FinCEN IDs -  The requirement for U.S. persons who obtained a FinCEN ID to update or correct the information associated with such ID is eliminated;
• Company Applicants of Foreign Entities -The requirement for foreign entities to report U.S. persons as “company applicants” (i.e., the individuals who helped those foreign entities register to do business in the U.S.) is eliminated;
• Control of Foreign Pooled Investment Vehicle - Foreign pooled investment vehicles are not required to report the BOI of a U.S. person who exercises substantial control over the investment vehicle; and
• Deletion of Reported Data about U.S. Persons - FinCEN announced that it will delete from the BOI database previously reported information about any company applicants, beneficial owners, or recipients of a FinCEN ID that FinCEN reasonably believes were U.S. persons, based on information such as the submission of a U.S. passport or U.S. driver’s license when initially reporting information.

Continuing Obligations

The final rule did not eliminate the CTA reporting requirements applicable to foreign entities that are “reporting companies” under the CTA or alter the applicable reporting deadlines. However, such entities are not required to report BOI for beneficial owners or company applicants who are U.S. persons. A “reporting company” is defined as an entity formed under the laws of a foreign country that is registered to do business in any U.S. state or tribal jurisdiction. Therefore, the CTA’s BOI reporting requirements do not apply to entities created under U.S. law, regardless of whether they are owned or controlled by U.S. or foreign persons or entities.

Further, non-U.S. persons who hold FinCEN IDs remain required to update or correct the information about non-U.S. Persons associated with those IDs.

Other reporting obligations, including those imposed by the Bureau of Economic Analysis or under applicable tax laws, remain unaffected by the final rule. The final rule also does not modify FinCEN’s Customer Due Diligence Rule (“CDD Rule”), although FinCEN has indicated that it intends to address the CDD Rule separately.

Looking Ahead

The exemptions for domestic entities and other changes under the final rule will provide relief to domestic businesses, including U.S.-formed subsidiaries of foreign businesses. Foreign businesses that conduct their U.S. operations exclusively through such subsidiaries therefore will not have CTA BOI reporting obligations for those U.S.-formed entities. However, businesses should remain mindful of other reporting obligations that may apply under applicable law and continue to monitor relevant regulatory developments.

For More Information

Our attorneys at Tarter Krinsky & Drogin are actively monitoring developments relating to the CTA and other applicable reporting and corporate-compliance requirements. Please contact a member of the team to discuss how these developments may affect your business.