The US ends domestic beneficial ownership reporting: what changed and what it means for country risk

U.S.-formed companies are no longer required to report BOI to FinCEN, and U.S. persons are not required to provide BOI, including where they are beneficial owners of a foreign reporting company. Certain foreign companies registered to do business in the United States remain subject to BOI reporting, but generally only in respect of non-U.S.-person beneficial owners.

FinCEN's final rule closes out a process that started in March 2025, when the Treasury suspended enforcement of the Corporate Transparency Act against domestic entities and FinCEN issued an interim rule reflecting that. The interim rule was never permanent law. This one is.

What the rule does

The final rule does five specific things:

• It makes the March 2025 exemption for US companies and US persons permanent.
• It exempts anyone who already holds a FinCEN ID from having to update or correct the information they gave to get it.
• It removes the requirement for foreign companies to report the US persons who acted as their "company applicants" when registering to do business in the US.
• It exempts foreign pooled investment vehicles registered in the US from reporting the beneficial ownership of any US person who controls them. And;
• FinCEN will delete beneficial ownership data it already holds on anyone it reasonably believes is a US person, identified through a US passport or driver's licence on file.

Foreign entities that are reporting companies keep their obligation. They still have to report beneficial ownership information for their foreign individual owners.

Why the reporting requirement existed in the first place

The Corporate Transparency Act became law on 1 January 2021, as part of that year's Anti-Money Laundering Act. FinCEN's implementing rule followed in September 2022 and took effect on 1 January 2024. Under it, a beneficial owner was anyone who owns 25% or more of a company or exercises substantial control over it, and the intent was to close a long-standing gap: anonymous shell companies formed in the US with no public or centrally held record of who actually owned them.

What changed in August 2026

The March 2025 interim rule, which has been in effect and unenforced against domestic companies for over a year already, became permanent. The exemption can no longer be undone by a change in enforcement policy alone.

The FATF angle

The US is likely to face more acute scrutiny under Recommendation 24 and Immediate Outcome 5 because the principal federal Beneficial Ownership information repository no longer covers domestic entities, the class most central to a jurisdiction’s legal-person transparency regime. FinCEN's response has been that the Customer Due Diligence Rule, which requires financial institutions to collect beneficial ownership data from legal entity customers at account opening, still applies and covers the gap. Whether that satisfies FATF's assessors is a separate question from whether it satisfies a compliance team's own risk model, and it's one every firm with US exposure will need to answer for itself.

 

Also interesting is the difference between the FinCEN approach and that of the EU. The EU AMLA approach is likely FATF-compatible in design, provided official access remains direct and rapid, data quality is demonstrably robust, and the legitimate-interest process does not impair legitimate AML/CFT users.

 

Neither system is judged mainly on public transparency. FATF will focus on coverage, accuracy, currency, verification, timely authority access, sanctions/enforcement, and demonstrated use in investigations and international cooperation.

What this means for your risk assessments

At KnowYourCountry, we're reviewing the US country report to reflect the final rule: no domestic beneficial ownership reporting obligation, continued foreign-entity reporting, and reliance on the Customer Due Diligence Rule at the financial institution level as the remaining mechanism for capturing beneficial ownership on US relationships. If your EDD framework for US counterparties assumes CTA-level registry data is available, that assumption needs revisiting now, not at your next scheduled review.