Corporate Governance

The CTA Turnaround: Domestic Companies Exempt, Foreign Entities Targeted

Kirke Marsch

Vice President TABS

Jan 16, 2026

7 minutes

the-cta-turnaround

Table of Contents

The Narrowing Focus: Defining Foreign Reporting CompaniesUnderstanding Your BOI ExemptionsWhat This Means for Foreign-Owned EntitiesActionable Steps for Foreign-Owned EntitiesConclusion

In 2025, after months of legal uncertainty, the U.S. Treasury and FinCEN issued an interim final rule that dramatically altered the landscape of the Corporate Transparency Act (CTA) which was originally established to combat illicit financial activity.

The Headlines:

  • Domestic Relief: Millions of U.S. entities are effectively exempt from reporting Beneficial Ownership Information (BOI) under the CTA.
  • Foreign Focus: The compliance burden has shifted almost entirely to Foreign Reporting Companies.

This is not a repeal of the CTA; it is a massive pivot in priority. The CTA has transitioned from a general obligation for all U.S. operators to a targeted enforcement tool. For any international business registered in the U.S., compliance is no longer optional—it is the primary focus of federal regulators.

The Narrowing Focus: Defining Foreign Reporting Companies

Under the new interim final rule, the definition of a "reporting company" is now significantly narrowed. An entity is classified as a Reporting Company if it meets two specific criteria:

1.
It was formed under the law of a foreign country.
2.
It has registered to do business in any U.S. state, tribal jurisdiction, or territory by filing a document with a Secretary of State or equivalent office.
If your foreign entity is registered with any secretary of state in the U.S., your entity is now subject to the reporting requirement unless you qualify for one of the original 23 statutory exemptions (e.g., banks, large operating companies, tax-exempt entities). U.S. domestic entities are no longer required to make, update or maintain a BOI registration, regardless of the nationality of your owners.

Understanding Your BOI Exemptions

What This Means for Foreign-Owned Entities

The revised schedule and deadlines provide clarity but demand immediate action for existing Foreign Reporting Companies to ensure FinCEN Compliance:

Pre-Existing Foreign Entities: Foreign entities registered to do business in the U.S. before March 26, 2025, had to file their initial BOI report no later than April 25, 2025.
New Foreign Entities: Foreign entities registered to do business in the U.S. on or after March 26, 2025, have 30 calendar days to file their initial BOI report after receiving notice that their registration is effective.
Updates and Corrections: Any change to the previously reported BOI (e.g., a change in ownership or address for a non-U.S. person beneficial owner) must be updated with FinCEN within 30 days of the change.

The penalties for non-compliance are severe, including civil penalties of up to $500 for each day the violation continues and potential criminal penalties.

Actionable Steps for Foreign-Owned Entities

This fundamental shift in the regulatory landscape means that while domestic firms can stand down, Foreign Reporting Companies must accelerate their FinCEN Compliance efforts.

This is where TABS’s Corporate Governance and Compliance expertise comes in. TABS specializes in navigating the complex compliance landscape for foreign entities in the U.S. If your foreign entity is registered to do business in the U.S., we can assist you in filing and maintaining your BOI report. Our team handles the entire operational execution of the filing, ensuring full FinCEN Compliance and minimizing your risk exposure.
We can:
1.
Determine Your Status:
Confirm whether your entity is a Foreign Reporting Company registered in the U.S. (by filing a document with a Secretary of State).
2.
Identify Non-U.S. Owners:
Identify all non-U.S. person beneficial owners (those with 25% ownership or substantial control).
3.
Prepare Documentation:
Gather the required personal identification documents and addresses for all non-U.S. beneficial owners and company applicants.

Given the complex nature of beneficial ownership determination and the severity of penalties, relying on expert guidance is essential to ensure every filing is accurate and timely.

Conclusion

The CTA framework gives clarity and sets a firm compliance path for foreign-owned businesses. If your company is formed abroad and registered in the United States, you fall within the BOI reporting scope. You should act now to confirm your status, collect your ownership information, and file on time. If you want assistance with the full filing process, please contact us.

Disclaimer: This article provides general information and does not constitute legal, tax, or accounting advice. To evaluate your specific situation and ensure full compliance, contact TABS today. We will assess your equity plan, handle all operational execution, and connect you with the appropriate specialized U.S. tax attorneys and CPAs within our trusted network.