FinCEN Beneficial Ownership Rule

FinCEN Beneficial Ownership Rule

FinCEN Beneficial Ownership Rule

FinCEN’s beneficial ownership rule, formally the Beneficial Ownership Information reporting requirement under the Corporate Transparency Act, requires certain companies to report their beneficial owners directly to FinCEN. As of an interim final rule FinCEN published on 26 March 2025, the requirement no longer applies to companies formed in the United States or to US persons. Only foreign-formed entities registered to do business in the US currently have to file, a dramatic narrowing from the rule’s original scope.

Key takeaways

  • FinCEN’s beneficial ownership rule requires certain companies to report beneficial owners directly to FinCEN under the Corporate Transparency Act.
  • As of an interim final rule published 26 March 2025, US-formed companies and US persons are exempt.
  • Only foreign-formed entities registered to do business in the US currently have to file.
  • The Eleventh Circuit upheld the CTA’s constitutionality on 16 December 2025, a separate question from FinCEN’s own administrative exemption.
  • This exemption removed more than 99% of the entities originally expected to be covered, per a GAO review.
  • Penalties, roughly $591/day civil, up to $10,000 and 2 years imprisonment criminal, remain on the books for entities still in scope.
  • This is a different rule from FinCEN’s Customer Due Diligence Rule, which requires banks to identify their own customers’ beneficial owners and was unaffected by the 2025 changes.

26 Mar 2025

Date FinCEN’s interim final rule exempting US companies took effect

Source: FinCEN

99%+

Of originally covered entities removed from scope by the 2025 exemption

Source: US GAO, via Holland & Knight

$591/day

Inflation-adjusted civil penalty for a continued BOI reporting violation still within scope

Source: Corporate Transparency Act

What FinCEN’s beneficial ownership rule actually requires

FinCEN’s beneficial ownership rule requires certain companies to file a Beneficial Ownership Information report, a BOI report, directly with FinCEN, identifying the individuals who own or control the company. It was designed to close a well-documented gap: anonymous shell companies had long been usable to hide the real people behind financial crime, since most US states don’t require ownership disclosure when a company is formed.

The rule as currently written applies to a much narrower population than when it was first finalised, and getting the current scope right matters, because a large amount of content online still describes the original, broader version.

The rule’s legal basis is the Corporate Transparency Act, enacted as part of the Anti-Money Laundering Act of 2020, itself part of the National Defense Authorization Act for that year. FinCEN’s implementing regulation sits at 31 C.F.R. § 1010.380, with the underlying statutory authority at 31 U.S.C. § 5336. The reporting requirement took effect 1 January 2024, with FinCEN given statutory discretion to extend deadlines for most reporting companies as far out as 1 January 2026 while implementation was worked through.

What changed on 26 March 2025

The rule’s scope changed sharply in early 2025. Following a 2 March 2025 Treasury Department announcement, FinCEN issued an interim final rule on 26 March 2025 that redefined “reporting company” to mean only entities formed under the law of a foreign country that have registered to do business in a US state or tribal jurisdiction. Entities formed in the United States, previously called domestic reporting companies, and US persons acting as beneficial owners of any reporting company, were removed from the requirement entirely.

Existing foreign reporting companies were given at least an additional 30 days from the 26 March 2025 publication date, generally until 25 April 2025, to file.

Who still has to file today

Today, the only entities required to file a BOI report are those formed under foreign law that have registered to do business in the US by filing with a secretary of state or similar office, previously known as foreign reporting companies. For these entities, the requirement to identify beneficial owners under the same 25%-ownership-or-control test still applies in full, and filing deadlines run from the 26 March 2025 interim final rule’s publication date.

Who’s exempt now

Every entity formed under US law is now exempt, regardless of size, industry, or ownership structure, a change FinCEN itself described as removing more than 99% of the entities originally expected to fall under the rule, according to a subsequent Government Accountability Office review. US persons are also exempt from any obligation to report their own beneficial ownership information in connection with any reporting company, foreign or domestic.

Foreign pooled investment vehicles have their own narrower rule: they don’t need to report US persons as beneficial owners, but do need to report any non-US person who exercises the greatest degree of substantial control over the vehicle, if one exists.

What information a filing actually requires

For entities still required to file, a BOI report requires each beneficial owner’s full legal name, date of birth, current address, and a unique identifying number from an acceptable identification document, along with an image of that document. Beneficial owners are identified using the same ownership prong, 25% or more equity, and control prong, significant managerial authority, used elsewhere in US beneficial ownership law.

The Eleventh Circuit ruling and what it did (and didn’t) change

The Eleventh Circuit Court of Appeals ruled on 16 December 2025 that the Corporate Transparency Act itself is constitutional, resolving one of several legal challenges the law faced after enactment. That ruling addressed the law’s constitutionality, not FinCEN’s separate administrative decision to exempt domestic companies through the March 2025 interim final rule.

The two are independent. The CTA being constitutional doesn’t require FinCEN to enforce it against domestic companies, and FinCEN’s own rule currently keeps that exemption in place regardless of the litigation outcome. A final rule addressing the long-term scope of the requirement was still pending, with FinCEN indicating further rulemaking would follow.

Why this rule has been so unstable

Few AML-adjacent rules have changed this many times this quickly. The original compliance timeline, litigation over the CTA’s constitutionality in multiple federal courts, a change in political administration, and a Treasury Department policy reversal all landed within roughly a two-year window. For a compliance function, the practical lesson isn’t just what the rule currently says, it’s that this specific rule has a documented history of changing with little notice, which argues for checking FinCEN’s own current guidance directly rather than relying on a saved reference from even a year earlier.

Worth knowing. This rule has changed direction multiple times in under two years: original 2024 effective date, litigation across multiple federal courts, a change in political administration, and a March 2025 policy reversal. A final rule addressing its long-term scope was still pending as of the most recent guidance available.

Penalties: what’s actually being enforced right now

Under the current interim final rule, FinCEN has stated explicitly that it will not enforce penalties or fines against US companies or US persons for BOI reporting. The statutory penalty framework itself, civil penalties adjusted for inflation to roughly $591 per day of continued violation, and criminal penalties of up to $10,000 and two years imprisonment for wilful violations, remains on the books and continues to apply to the foreign reporting companies still within scope.

This is not the same as FinCEN’s CDD Rule

This rule is frequently confused with FinCEN’s Customer Due Diligence Rule, and that confusion is worth clearing up directly. The CDD Rule, at 31 C.F.R. § 1010.230, requires banks to identify the beneficial owners of their own legal entity customers, and was entirely unaffected by the 2025 changes described here. A bank still has to collect beneficial ownership information from a US company opening an account, even though that same US company no longer has to report the same information directly to FinCEN under the Corporate Transparency Act.

What to actually do if this might apply to your company

A company trying to work out whether this currently applies to it should start with one question: was the entity formed under US law, or under the law of a foreign country? US-formed entities can generally treat the reporting obligation as currently suspended, though FinCEN has signalled further rulemaking is coming and the position could change again. Foreign-formed entities registered to do business in the US should treat the obligation as fully live, with the ownership and control prong analysis and filing deadlines described above still applicable. Given the rule’s volatility, checking FinCEN’s own BOI page directly before making a final compliance decision is the safest practical step regardless of what any single article, including this one, says at a given point in time.

Confirm your current filing status

Check whether your entity structure still requires a BOI filing under the narrowed 2025 rule.

Try the CDD vs EDD Tool →

Frequently asked questions

What is FinCEN’s beneficial ownership rule?

It’s the requirement, under the Corporate Transparency Act, for certain companies to report their beneficial owners directly to FinCEN. As of March 2025, it applies only to foreign-formed entities registered to do business in the US.

Do US companies have to file a BOI report?

No, not currently. FinCEN’s interim final rule of 26 March 2025 exempted all US-formed entities and US persons from the reporting requirement.

Who still has to file a beneficial ownership report?

Only entities formed under foreign law that have registered to do business in a US state or tribal jurisdiction, previously known as foreign reporting companies.

When did the beneficial ownership reporting requirement change?

FinCEN published an interim final rule on 26 March 2025, following a Treasury Department announcement on 2 March 2025, that narrowed the reporting population to foreign-formed entities only.

Is the Corporate Transparency Act constitutional?

Yes. The Eleventh Circuit Court of Appeals upheld the CTA as constitutional on 16 December 2025. That ruling didn’t affect FinCEN’s separate exemption for domestic companies.

What is the beneficial ownership threshold under this rule?

The same as elsewhere in US beneficial ownership law: 25% or more equity ownership, or significant managerial control regardless of ownership percentage.

What penalties apply for not filing a required BOI report?

Civil penalties of roughly $591 per day of continued violation, and criminal penalties of up to $10,000 and two years imprisonment for wilful violations, still apply to entities within the current, narrowed scope.

Is this the same as FinCEN’s Customer Due Diligence Rule?

No. The CDD Rule requires banks to identify beneficial owners of their own customers and was unaffected by the 2025 changes. The Corporate Transparency Act requires companies to report their own beneficial owners directly to FinCEN.

Could the rule change again?

Yes. FinCEN has indicated a further final rule is still pending, and this specific requirement has changed multiple times in a short period, so checking FinCEN’s own current guidance before relying on any single source is the safest approach.

Read more: our ultimate guides, whitepapers and templates

Related guides and resources to help you act on what you just read.

Last reviewed July 19, 2026 · 11 min read · Written for compliance and risk professionals · By the WhoWiki editorial team

Key takeaway: FinCEN’s beneficial ownership rule, formally the Beneficial Ownership Information reporting requirement under the Corporate Transparency Act, requires certain companies to report their beneficial owners directly to FinCEN. As of an interim final rule FinCEN published on 26 March 2025, the requirement no longer applies to companies formed in the United States or to US persons. Only foreign-formed entities registered to do business in the US currently have to file, a dramatic narrowing from the rule’s original scope.

Learn & stay current

A compliance reference that keeps up with the regulators

Plain-English explainers, country rules, and data you can cite, updated as the landscape moves.

Comparing tools before you commit?

See how WhoWiki lines up against the platforms you already know, and which free tools fit which job.

See how current your screening could be

Book a walkthrough with our team, or start with the tools today. No account needed to run your first check.