Client Advisory: Navigating the Latest Developments Under the Corporate Transparency Act (CTA) | By: Chris Manderson

The Corporate Transparency Act (CTA) saga has taken yet another turn. On March 2, 2025, the U.S. Department of the Treasury announced that it will suspend enforcement of the CTA’s beneficial ownership reporting requirements for U.S. citizens and domestic reporting companies. This means that for most U.S.-based businesses no penalties will be imposed for non-compliance. However, Treasury clarified that foreign reporting companies remain subject to CTA reporting obligations and must continue to report beneficial ownership information (BOI) under the existing framework. This advisory outlines the key compliance obligations for foreign entities, details the Treasury’s announcement, and explains what businesses can expect from forthcoming regulatory changes.

Treasury Department Suspends CTA Enforcement for U.S. Entities

On March 2, 2025, the U.S. Department of the Treasury announced a major policy shift, suspending enforcement of the Corporate Transparency Act (CTA) reporting requirements for U.S. citizens and domestic reporting companies.

Key Points from the Treasury Announcement:

1. No Enforcement Against U.S. Businesses
• Treasury will not impose penalties or fines for non-compliance with BOI reporting by U.S. citizens or U.S.-registered entities.
• This suspension applies both before and after forthcoming rule changes.
2. Foreign Reporting Companies Still Subject to CTA Compliance
• The CTA will continue to apply to foreign reporting companies.
• Treasury emphasized that the reporting framework remains in place for non-U.S. entities operating in the U.S. 
3. Planned Regulatory Revisions
• Treasury announced plans to issue a proposed rule that will narrow the CTA’s scope to foreign reporting companies only.
• The government’s stated goal is to reduce regulatory burdens on small businesses and American taxpayers while maintaining key transparency provisions for foreign entities.
4. Political & Policy Justification
• Treasury Secretary Scott Bessent stated that this decision is part of the Trump administration’s deregulatory agenda aimed at fostering economic growth and reducing compliance burdens on American businesses.

🔗 Full Treasury Press Release

Reporting Deadline No Longer Applies to U.S. Companies—Foreign Entities Must Still Comply

With the Treasury’s March 2, 2025 announcement, the March 21, 2025 deadline no longer applies to U.S. citizens or domestic reporting companies. However, foreign reporting companies must still meet their BOI reporting obligations. These entities should ensure they comply with CTA requirements to avoid potential enforcement actions.

Foreign Entities: Who Must Report and What Information is Required?

Foreign reporting companies, including those that are registered to do business in the United States but incorporated abroad, must continue to comply with the CTA. Below are the key compliance obligations for foreign entities:

Who Must Report?

• Foreign companies that are registered to do business in the United States.
• Entities formed under non-U.S. jurisdiction that have significant U.S. operations or beneficial owners.

What Information Must Be Reported?

• Full legal names of all beneficial owners.
• Date of birth, current residential or business address.
• Government-issued identification (passport or equivalent document).
• Ownership percentage and control structure details.

Where and How to File?

• Reports must be submitted through FinCEN’s BOI E-Filing System:
  🔗 https://boiefiling.fincen.gov
• Reporting must be done electronically, and any changes in ownership must be updated within 30 days.

Foreign entities should continue monitoring Treasury and FinCEN guidance for any changes to the reporting framework.

Bottom Line:  No Penalties for U.S. Businesses—Foreign Entities Must Still Comply 

Since the CTA no longer applies to U.S. entities, there are no penalties for non-compliance for domestic businesses. However, foreign reporting companies remain subject to enforcement and must comply with their BOI reporting obligations to avoid civil and criminal penalties.