One Rule Change Exempted US Companies from BOI Reporting. What Does It Mean for Foreign Founders?

TL;DR

• In March 2025, FinCEN exempted all US-created companies from beneficial ownership reporting under the Corporate Transparency Act.
• Foreign companies registered to do business in the US are still required to file — and most foreign founders either don’t know this or assume someone else handled it.
• If you are a non-US founder with a Delaware LLC, New York corporation, or any US-registered entity with foreign ownership, this article is for you.

What Is BOI Reporting and Why Does It Matter for Foreign Business Owners?

BOI stands for Beneficial Ownership Information. The Corporate Transparency Act (CTA) requires some companies to tell FinCEN—the US Treasury’s Financial Crimes Enforcement Network—exactly who really owns them. It’s aimed at preventing shady people from hiding behind anonymous companies and using them for money laundering, dodging taxes, or other financial crimes.

The CTA kicked in back in January 2024, catching tens of millions of US companies. At first, it led to a lot of confusion—lawsuits, temporary halts, and rules that kept shifting. But by March 2025, the US Treasury put its foot down and cleared things up with a final rule. Here’s the twist: the change slipped right past a lot of international business owners.

What Changed in March 2025

The Treasury issued an official rule that does two big things:

First, US companies and US persons are now off the hook. They don’t have to file BOI reports with FinCEN anymore.
Second, the rule narrows its focus to foreign reporting companies—companies with foreign founders or significant foreign ownership.

Meaning: if you’re a US founder running a US company, you’re in the clear. No reports, no hassle. But if you’re a foreign founder who has a US-registered company, you’re not off the hook. Those reporting rules still apply to you, just like before.

In short: US founders can relax. Foreign founders with US companies still need to keep their BOI filings in order—or risk the consequences if they don’t.

Who Still Has to File BOI in 2026?

FinCEN revised the definition of “reporting company” to mean only those entities formed under the law of a foreign country that have registered to do business in any US state or tribal jurisdiction by filing a document with a secretary of state or similar office.

Practical examples of who is still in scope:

• A Cyprus holding company registered to do business in Delaware
• A UAE free zone company that opened a New York branch
• A BVI or Cayman Islands entity registered in California or Texas
• Any offshore structure used as a parent company for US operations

Practical examples of who is NOT in scope:

• A Delaware LLC formed directly by a foreign individual — exempt as a domestic entity
• A US subsidiary of a foreign company — usually exempt
• A foreign company that does NOT register in any US state — not a reporting company

Important note: a structure with several entities across countries is worth reviewing entity-by-entity. The exemption applies at the entity level, not the ownership level.

What Beneficial Ownership Information Must Be Reported?

The definition of beneficial owner has not changed. It means any individual who owns or controls 25% or more of the company’s ownership interests, or exercises substantial control over the company (senior officers, board members, key decision-makers).

What must be reported for each non-US beneficial owner:

• Full legal name
• Date of birth
• Current residential address
• Unique identifying number from a passport or driver’s license
• Image of the identifying document

Important: Foreign entities are not required to report US persons as beneficial owners. US persons are also exempt from providing their BOI to those foreign companies.

BOI Reporting Deadlines for Foreign Companies

30-day window: where most foreign founders fall behind

Typically, a registered agent state formation is handled by. The federal BOI filing with FinCEN is a separate obligation — and no one at the formation stage is required to flag it.

By the time a founder asks about US compliance, the window has often already passed.

Is the BOI Rule Still Changing?

Yes. FinCEN said it wanted to finalize the interim BOI rule by late 2025, but we’re still waiting. Realistically, we’ll see a final rule in 2026. Still, one thing hasn’t changed: foreign companies registered in the US have to report their non-US beneficial owners.

Appellate courts have weighed in, too. In December 2025, the Eleventh Circuit shot down a lower court’s objection and confirmed that the CTA is constitutional. So, if you’re a foreign founder, don’t treat compliance rules as postponed — they’re very much in effect right now.

The Compliance Gap: Why Foreign Founders Miss This

The pattern is consistent across international founders setting up US operations:

Step 1: Company incorporated offshore — Cyprus, UAE, BVI, Cayman Islands. Step 2: US entity formed to sign American contracts, open a US bank account, or participate in a fundraise. Step 3: Registered agent handles state-level formation. Founder receives confirmation. Step 4: Nobody mentions the 30-day federal BOI window. Step 5: Six months later — overdue filing, discovered during investor due diligence or bank KYC.

The mismatch between what was filed with FinCEN and what is represented to a bank or investor creates a compliance gap that compounds with time and accumulates $500 per day in civil penalties.

Three Steps to Close the Compliance Gap Now

Step 1 — Check your structure Determine whether your structure includes any foreign-formed entity registered to do business in a US state. Review whether any of the 23 statutory exemptions apply — most cover large regulated entities like banks and public companies.

Step 2 — File immediately if overdue FinCEN accepts BOI reports electronically through its E-Filing system. If you are past the deadline, please file as soon as possible; ongoing violations accrue daily penalties.

Step 3 — Monitor for the final rule FinCEN is expected to publish a final rule in 2026. Monitor fincen.gov/boi for updates and consult a legal advisor before making long-term structural decisions based on the current interim rule.

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Legarithm advises international founders on US company formation, BOI compliance, and corporate structuring across multiple jurisdictions. If you have a US entity and are not sure your filings are in order, reach out at legarithm.io.