Corporate Transparency Act After the Domestic Exemption: What Still Bites and Who Still Files

The Corporate Transparency Act did not go away in March 2025. FinCEN cut most US firms out of the reporting scope, which is not the same thing, and the difference is where compliance teams are now getting caught.

For most of 2024 the Corporate Transparency Act (CTA) was a live obligation for roughly every small company in the United States: file beneficial ownership information (BOI) with FinCEN, name the humans who own or control the entity, keep it current. Then, on 21 March 2025, FinCEN announced an interim final rule, published in the Federal Register on 26 March, that removed the reporting requirement for US companies and US persons entirely. The headlines read as though the CTA had been repealed. It has not been. The statute stands, the register stands, and a class of entities still has to file. What changed is the definition of who counts as a reporting company, and that narrowing has left firms doing one of two wrong things: either continuing to prepare filings they no longer owe, or assuming the whole regime is dead and dropping beneficial-ownership discipline they still need for other reasons.

What the interim rule actually did

The interim final rule 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. Everything created by a filing with a US state — the domestic LLCs, corporations and limited partnerships that made up the overwhelming bulk of the original 30-million-plus estimated filer population — is now exempt. FinCEN’s own language is blunt: it removed the requirement for US companies and US persons to report BOI. Domestic reporting companies, as a category, no longer file. US persons do not file. If your entity was formed in Delaware, Wyoming, New York or anywhere else in the fifty states, the federal obligation is, for now, off.

This is a regulator narrowing scope by rule rather than a legislature repealing a statute, and the distinction matters. It is the mirror image of the pattern we wrote about when Australia removed its small business exemption from the Privacy Act — there, an exemption was being taken away; here, one is being handed out. In both cases the trap is the same: treating an administrative shift as permanent architecture. The CTA rule is explicitly interim. FinCEN opened a 60-day comment period and stated it intends to issue a final rule. A future administration, a court, or that final rule could move the line again.

Who still files

Foreign reporting companies still file. If an entity was formed under the law of another country and has registered to do business in a US state or with a tribal jurisdiction, it remains in scope and must submit BOI to FinCEN. The relief for this group is partial rather than total: a foreign reporting company is not required to report any US persons as its beneficial owners, and US persons who are beneficial owners of such a company are not required to provide their information to it. So the filing survives, but the data set inside it shrinks to non-US beneficial owners.

The deadlines ran from the rule’s publication. Foreign reporting companies already registered before publication were given 30 days from that date to file — landing in late April 2025. Foreign companies registering afterwards get 30 calendar days from the point their registration becomes effective. If you operate a group with non-US holding vehicles or offshore entities qualified to trade in a US state, this is not academic; it is a live filing obligation with a running clock, and the exemption most of your US subsidiaries now enjoy does nothing for the foreign-formed ones.

The state regimes do not follow FinCEN

The more durable point is that beneficial-ownership transparency in the US is no longer only a federal matter. New York’s LLC Transparency Act took effect on 1 January 2026. As originally drafted it would have swept in every LLC doing business in the state. A late chapter amendment signed by the governor narrowed it so that, in its operative form, only foreign LLCs — those formed outside the United States — must file beneficial-ownership disclosures with the state, while US-formed LLCs are exempt. That is a deliberate echo of the federal carve-out, but it is a separate statute, on its own timetable, with its own register and its own definitions of beneficial owner and substantial control. Other states have their own transparency proposals at various stages. The federal exemption gives you no shelter from any of them.

For a technology and compliance function this is the operative consequence: you cannot decommission the capability, only pause part of its output. The entity register, the mapping of ownership and control, the identity evidence for beneficial owners — that underlying data infrastructure is exactly what a foreign-reporting-company filing, a New York state filing, a bank’s customer due diligence, or a future reinstated federal rule will each demand. Tearing it down because the federal domestic obligation lapsed means rebuilding it under deadline the next time any of those bite.

What to do with the carve-out

The disciplined response is the same one we argued for when the EU deferred parts of the AI Act and firms were tempted to down tools: a deferral is not a cancellation, and the work you must still do before the clock restarts is most of the work. Concretely, three things. First, classify every entity in the group by formation jurisdiction and US registration status, so you can say on demand which are domestic-exempt and which are foreign reporting companies with a live federal filing. Second, keep the beneficial-ownership data model maintained and current — owners, control persons, identity documents — even where nothing is currently filed federally, because state and AML obligations draw on the same source. Third, treat the interim rule as reversible and diarise the comment-period and final-rule milestones rather than closing the file.

The firms that will struggle are not the ones that kept filing out of caution. They are the ones that read “US companies no longer report” as “beneficial ownership no longer matters”, deleted the register, and now have to reconstruct who controls what — under a foreign filing deadline, a New York register, or a bank’s onboarding demand — from scratch.