From EMA
In a significant deregulatory move, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule on August 11, 2026, making permanent the exemption of U.S. companies and U.S. persons from federal beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA). The rule builds on an interim final rule from March 2025 and provides for the deletion of previously submitted information that FinCEN reasonably believes was provided by U.S. persons.
Enacted in 2021 as part of broader anti-money laundering efforts, the CTA required most U.S. companies—particularly smaller ones not already subject to extensive federal oversight—to report the identities of their “beneficial owners.” These were generally defined as individuals holding 25% or more ownership or exercising substantial control. The goal was to increase transparency around shell companies and curb illicit finance, tax evasion, and other crimes.
Implementation proved burdensome. Estimates suggested the rules could affect around 30 million entities. Small business owners reported high compliance costs, confusion over requirements, and the risk of civil penalties and potential criminal liability for willful non-compliance. Critics argued the rules disproportionately hit legitimate domestic businesses rather than sophisticated criminal networks. The Trump administration first paused enforcement for U.S. entities in early 2025, framing the reporting as invasive and an economic burden. FinCEN's subsequent rulemaking narrowed the reporting regime to focus on certain foreign entities rather than U.S.-formed companies.
The final rule makes the earlier exemptions permanent and clarifies and makes permanent the revised reporting framework:
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U.S. companies (those formed under U.S. law) are fully exempt from BOI reporting. They no longer need to file initial reports, updates, or corrections.
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U.S. persons are not required to report as beneficial owners or company applicants, and U.S. persons are not required to provide their BOI to a reporting company.
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U.S. persons who hold FinCEN IDs are not required to update or correct the information they previously submitted to obtain those IDs.
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FinCEN will implement a process to delete previously reported information concerning individuals—such as beneficial owners, company applicants, or FinCEN ID holders—that it reasonably believes was provided by U.S. persons, including information associated with a U.S. passport or driver's license.
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Certain foreign companies formed under the law of a foreign country and registered to do business in a U.S. state or tribal jurisdiction remain subject to BOI reporting. However, those companies are not required to report BOI concerning U.S. persons, including U.S. person beneficial owners and U.S. person company applicants.
One important point should be emphasized: The CTA itself has not been repealed. Rather, FinCEN has used its regulatory authority to narrow the definition of entities subject to the reporting requirements. As a result, the federal BOI reporting regime now generally applies only to certain foreign entities registered to do business in the United States.
The change represents significant compliance relief for U.S. businesses, particularly small businesses that previously faced uncertainty and administrative costs associated with the CTA's reporting requirements. It also reflects the Administration's stated view that BOI collection should be focused on foreign entities presenting greater money-laundering and national-security risks rather than the millions of legitimate U.S. businesses.
Businesses should nevertheless be careful not to assume that the elimination of federal CTA reporting eliminates all beneficial-ownership disclosure obligations. Banks and other financial institutions may continue to collect ownership information under separate customer-due-diligence and anti-money-laundering requirements, and state or other federal laws may impose separate disclosure obligations. FinCEN expressly distinguishes the CTA's BOI reporting requirements from the separate requirements applicable to financial institutions.
Further updates from FinCEN and any related congressional activity will be worth tracking in the coming weeks. Because the CTA remains on the books, Congress could ultimately amend the statute, and future administrations could potentially revisit the regulatory framework. Whether the current approach will remain in place over the long term is therefore an issue worth watching.
