FinCEN finalizes CTA rule exempting domestic entities and US persons from beneficial ownership reporting

Key takeaways

• The CTA no longer applies to domestic entities.
• U.S. persons are no longer reportable beneficial owners or company applicants.
• Foreign reporting companies remain subject to a reduced reporting regime.
• FinCEN plans to purge previously submitted domestic company and U.S. person data from its BOI system.
• The final rule does not affect banks’ and other financial institutions’ existing CDD obligations.

On August 14, 2026, the Financial Crimes Enforcement Network (FinCEN) published a final rule revising beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA).

The final rule adopts and expands upon the interim final rule issued on March 26, 2025, permanently exempting domestic entities and U.S. persons from CTA reporting requirements and significantly narrowing the reporting obligations applicable to foreign reporting companies. Although certain foreign entities registered to do business in the United States remain subject to BOI reporting requirements, they generally are no longer required to collect, report, or update information regarding U.S. persons who are beneficial owners or company applicants. Additionally, FinCEN has eliminated the ongoing obligation for U.S. persons holding FinCEN Identifiers (FinCEN IDs) to update or correct information associated with those identifiers.

What does this mean?

• Permanent exemption for domestic entities: Domestic entities created under U.S. state or tribal law are removed from the definition of “reporting company” and are therefore no longer required to file initial BOI reports or update/correct previously filed reports.
• Exemption for U.S. person company applicants: The final rule exempts U.S. persons in their capacity as company applicants. As a result, foreign reporting companies do not need to report personal identifying information for U.S. person company applicants.
• Relief for FinCEN ID holders: U.S. individuals who previously obtained a FinCEN ID are no longer required to update or correct their personal identifying information (e.g., address changes or renewed driver’s licenses). On the other hand, non-U.S. individuals holding FinCEN IDs must continue to update/correct their information with FinCEN within 30 calendar days of a change to, or discovery of an inaccuracy in, previously reported information.
• Narrowed reporting obligations for foreign reporting companies: Entities formed under non-U.S. law that register to do business in any U.S. state or tribal jurisdiction remain classified as “reporting companies” and generally remain subject to CTA reporting obligations. These foreign entities that became reporting companies after March 26, 2025, generally must file an initial BOI report within 30 calendar days of the earlier of (1) receiving actual notice that their registration to do business in the United States has become effective or (2) the date when public notice of that registration is first provided. Foreign reporting companies also remain subject to ongoing obligations to update/correct previously reported information within 30 calendar days of a change in, or discovery of an inaccuracy in, information that remains reportable under the final rule. However, foreign reporting companies are exempt from reporting the BOI of any beneficial owner or company applicant who is a U.S. person. As a result, U.S. persons are exempt from any legal obligation to provide their BOI to foreign reporting companies. Additionally, if a foreign reporting company is owned or controlled exclusively by U.S. persons, it must still submit an initial report to FinCEN, but because no reportable beneficial owners would exist under the final rule, the report need not contain any beneficial owner information.
• Special rule for foreign pooled investment vehicles: Foreign pooled investment vehicles that do not qualify for a statutory exemption are required to report BOI only for the single non-U.S. individual exercising substantial control (or strategic management). If all individuals exercising substantial control over the foreign vehicle are U.S. persons, no BOI needs to be reported.

Treatment of previously submitted BOI data

In coordination with the National Archives and Records Administration, FinCEN has confirmed it will conduct a targeted, one-time sweep to purge previously submitted domestic company and U.S. person data, including recipients of a FinCEN ID, from its Beneficial Ownership IT System. To identify qualifying records, FinCEN will analyze internal data and specific submitted document types, such as U.S. passports and state driver’s licenses. Filers should not expect any individual deletion receipts or direct confirmations; instead, FinCEN intends to issue a single public notification once the sweep concludes. According to FinCEN, this cleanup applies strictly to historical filings. As described in the final rule, U.S. person information submitted after February 10, 2027, is not expected to be included in the one-time purge initiative. The final rule does not establish an individualized process through which filers may request deletion of previously submitted information.

Impact on financial institutions and customer due diligence (CDD)

FinCEN emphasized that the final rule does not alter financial institutions’ existing obligations under the 2016 CDD rule. Covered financial institutions (such as banks and broker-dealers) must continue collecting BOI directly from legal entity customers opening accounts, regardless of whether those customers are domestic or foreign entities. FinCEN stated that it will address potential revisions to the CDD rule in future separate rulemakings. Accordingly, covered financial institutions should not assume that the elimination of CTA reporting requirements for domestic entities reduces their independent obligation to collect beneficial ownership information from customers when required under applicable CDD requirements.

Key takeaway: Stay informed and prepared

U.S. entities are no longer subject to CTA beneficial ownership reporting requirements. Likewise, foreign reporting companies generally are no longer required to report U.S. persons as beneficial owners or company applicants. Foreign reporting companies should carefully evaluate whether they remain subject to the CTA’s revised reporting requirements and ensure they have processes in place to comply with applicable filing deadlines.

The final rule marks a significant retreat from the CTA’s original reporting regime. Domestic entities and U.S. persons are now broadly exempt from beneficial ownership reporting requirements, while CTA reporting obligations remain limited primarily to certain foreign entities registered to do business in the United States. Covered financial institutions, however, should note that the final rule does not modify existing customer due diligence obligations, and foreign reporting companies should continue to assess their reporting responsibilities under the revised framework.

Looking ahead, as reported in our prior publications, litigation concerning the CTA is expected to continue and may further shape the scope and implementation of beneficial ownership reporting requirements. And unless the CTA is repealed by Congress or ruled wholly unconstitutional by the Supreme Court of the United States, a future administration with different priorities could reinstate the full force of the CTA.

For more details regarding the CTA’s reporting requirements, see our prior publications regarding the CTA as a whole, a midyear status update, New York’s corporate transparency law, and our Compliance Collective CLE webinar, among other publications discussing the application of specific CTA exemptions or ambiguities.

Please reach out to your Ashurst Perkins Coie team with any questions or for support in relation to CTA compliance.