Effective 14 August 2026, a final rule issued by the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) permanently removed the requirement for US companies and US persons to report beneficial ownership information (BOI) to FinCEN.
The final rule puts to rest a reporting requirement for US entities considered burdensome for many, especially small businesses, and a mandate which had been challenged in the courts.
Proposed legislation to require certain US entities to report BOI to FinCEN first surfaced in 2019 as part of the Corporate Transparency Act (CTA) which passed in the US House of Representatives later that year. Enacted in 2021, the CTA created the statutory framework for FinCEN’s beneficial ownership reporting system. Three years later, FinCEN implemented regulations that took effect 1 January 2024 and required most entities formed or registered in the US to report BOI. Legal challenges to the requirement ensued and in March 2025, FinCEN eliminated the BOI reporting requirement for US-formed companies and US persons. This elimination is now permanent.
Under the final rule, foreign entities that are reporting companies are still required to report to FinCEN beneficial ownership information for foreign individuals. “Reporting companies” include entities that are formed under the law of a foreign country and have registered to do business in any U.S. jurisdiction. A “beneficial owner” is an individual (i.e., natural person) who either directly or indirectly: (1) exercises substantial control over the reporting company, or (2) owns or controls at least 25% of the reporting company’s ownership interests.
A Q&A produced by FinCEN explaining the final rule notes that covered financial institutions are still required to collect a legal entity customer’s beneficial ownership information under the Customer Due Diligence Rule.
