On August 11, 2026, the Financial Crimes Enforcement Network (FinCEN) issued a final rule that permanently eliminates the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) for U.S. companies and U.S. persons. The rule became effective on August 14, 2026. FinCEN also announced that it will delete previously reported information relating to U.S. persons from its BOI database.
This final rule adopts and expands the exemptions first introduced in FinCEN’s March 2025 interim final rule, providing long-awaited certainty after years of litigation, injunctions, and regulatory shifts.
Key Provisions of the Final Rule
- Permanent exemption for domestic entities: Entities formed under U.S. law are no longer “reporting companies.” They have no obligation to file initial, updated, or corrected BOI reports.
- U.S. persons fully exempt: U.S. persons are not required to provide BOI as beneficial owners or company applicants. Reporting companies need not report information about any U.S. person beneficial owners or company applicants.
- FinCEN ID holders: U.S. persons who previously obtained a FinCEN identifier are exempt from any obligation to update or correct the information they submitted to obtain the ID.
- Foreign company applicants: Foreign reporting companies no longer need to identify U.S. person company applicants (the individuals who filed or directed the filing of U.S. registration documents).
- Foreign pooled investment vehicles: Foreign pooled investment vehicles registered in the United States are exempt from reporting the BOI of any U.S. person exercising substantial control. If no non-U.S. person has substantial control, the vehicle need not report any beneficial owners.
- Data deletion: FinCEN will delete from its database information about individuals it reasonably believes are U.S. persons (for example, records linked to a U.S. passport or driver’s license), including data previously submitted by beneficial owners, company applicants, and FinCEN ID holders.
Who Remains Subject to Reporting
Under the final rule, “reporting companies” are limited to entities formed under the law of a foreign country that have registered to do business in any U.S. state or Tribal jurisdiction by filing a document with a secretary of state or similar office. These foreign entities must still report BOI, but only with respect to non-U.S. person beneficial owners. Multiple existing exemptions continue to apply, so foreign entities should carefully confirm whether they qualify as reporting companies.
FinCEN estimates that only a relatively small number of foreign entities remain subject to the reporting obligation.
Practical Implications
For U.S. companies and U.S. persons: The domestic BOI reporting obligation is permanently extinguished. No further filings are required. Companies that previously filed reports need take no additional action. FinCEN will purge U.S.-person data from the database.
For foreign entities registered in the United States: Reporting obligations continue in narrowed form. Confirm applicable deadlines (generally 30 days from registration notice under the prior interim framework) and ensure that only non-U.S. person beneficial ownership information is reported. Review whether any available exemptions apply.
For financial institutions: The 2016 Customer Due Diligence Rule, which requires covered institutions to identify and verify beneficial owners of legal entity customers at account opening, remains fully in effect and is unaffected by this final rule. FinCEN has indicated it intends to revisit aspects of the CDD Rule in light of the changes to the CTA reporting regime, but no timeline or specific proposals have been announced. Institutions should continue current CDD compliance practices while monitoring for further developments.
Background Context
The CTA was enacted in 2021 as part of the Anti-Money Laundering Act of 2020. FinCEN’s original 2022 implementing rule would have required tens of millions of domestic entities to report beneficial ownership information. After nationwide injunctions and a change in administration, Treasury and FinCEN moved in early 2025 to suspend enforcement against U.S. persons and domestic companies and issued the March 2025 interim final rule narrowing the requirements. The August 2026 final rule makes that relief permanent and adds the additional expansions described above.
Vedder's Investment Services Group and related practices are available to assist clients in confirming the impact of the final rule on their structures, particularly foreign entities with U.S. registrations, pooled investment vehicles, and financial institutions subject to the CDD Rule.
If you have any questions about this article, please contact Joe Mannon at jmannon@vedder.com or any other Vedder attorney with whom you have worked.
