The 2025 BOI rule changes, in plain English
What FinCEN's March 2025 interim final rule means for foreign-formed entities, and why most US founders are now exempt from filing.
On March 26, 2025, FinCEN published an interim final rule that fundamentally changed who has to file Beneficial Ownership Information (BOI) reports. If you are a US-formed entity, you almost certainly do not need to file anymore. If you are a foreign-formed entity registered to do business in the US, you still do. The headlines were noisy. The rule itself is short. This is the practical breakdown.
What changed
Before March 26, 2025, the Corporate Transparency Act required reporting beneficial ownership for almost every LLC, corporation, and similar entity formed in the United States. The implementation period had been messy, with courts pausing enforcement multiple times in late 2024 and early 2025. FinCEN responded with the interim final rule, which narrowed reporting in two important ways.
First, the rule revised the definition of "reporting company" to exclude entities formed in any US state, the District of Columbia, or US territories. Under the new definition, only entities formed outside the United States that have registered to do business in the US must file BOI reports.
Second, the rule clarified that US persons are not reported as beneficial owners on any BOI filing. Foreign-formed entities subject to BOI reporting only report non-US beneficial owners.
Who still has to file
A foreign-formed entity registered to do business in any US state must file an initial BOI report within 30 calendar days of the registration date. This applies to:
A Cayman Islands LLC that registers as a foreign LLC in Delaware. A UK Ltd. that registers to do business in New York. A Singapore Pte. Ltd. that registers in California. Any entity that was formed under the laws of a country other than the United States and then registered with a US state secretary of state.
If your foreign entity registered before the rule took effect, the 30-day clock has already started; you need to file. If you register after, the clock starts on the registration date.
Who does not have to file
If your business was formed in any US state · including Delaware, Wyoming, Nevada, California, New York, Texas, Florida, or any of the other 45 states and DC · you are not a reporting company under the current rule. This is true regardless of the citizenship of the owners. A US-formed LLC with all-foreign beneficial owners is exempt. A Delaware LLC with a UK individual as sole member is exempt.
Sole proprietorships that have not formed any entity at all are also exempt · they were never reporting companies under the original rule because no formation document was filed with a state.
What the report actually contains
For each non-US beneficial owner of a foreign-formed reporting company, the BOI filing includes: full legal name, date of birth, current residential address, and an image of an acceptable identification document (passport, foreign government ID with photo). The reporting company itself provides its legal name, any "doing business as" names, principal place of business address, US state of registration, and tax identification number.
All filings go through FinCEN's online BOI E-Filing System. There is no filing fee.
Updates and changes
If a foreign-formed reporting company changes its name, beneficial owners, or any reported information, it must file an updated BOI report within 30 days of the change. This is the most commonly missed requirement. Adding a new investor, changing a beneficial owner's home address, replacing the company's principal place of business · all of these trigger an update obligation.
Penalties for late filing or false reporting can include civil fines of up to $500 per day of violation and, in willful cases, criminal penalties of up to $10,000 and two years imprisonment. The Department of the Treasury has indicated enforcement will focus on willful and material violations, not first-time good-faith errors.
What this means for your formation strategy
If you are a foreign founder weighing whether to form a US LLC directly or to use a foreign holding company that registers in the US, the BOI exemption now favors direct US formation. A US-formed LLC owned by a foreign individual is not a reporting company. A Cayman LLC owned by the same foreign individual that registers in Delaware is a reporting company and must file BOI updates every time the owner moves house.
For most international founders, the simpler answer is also the cheaper one: form the LLC directly in a US state.
If the rule changes again
The March 2025 rule is an "interim final rule," which means FinCEN can revise it. The Corporate Transparency Act itself is also subject to ongoing litigation. A future administration or court could broaden reporting back to US-formed entities. Our compliance dashboard tracks the rule daily and alerts our customers if their filing obligations change.
For now, the working rule is: US-formed, no BOI filing. Foreign-formed and US-registered, file within 30 days of registration and update within 30 days of any change.
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