Treasury to Limit BOI Reporting Rule to Foreign Firms
The Treasury Department plans to modify its beneficial ownership information (BOI) reporting rule so that it applies only to foreign companies and not U.S. businesses, the agency announced March 2.
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The upcoming change is part of President Donald Trump’s agenda to reduce “burdensome regulations,” especially for American small businesses, Treasury Secretary Scott Bessent said.
The announcement came less than two weeks after a federal judge lifted a preliminary injunction on the BOI rule, prompting the Financial Crimes Enforcement Network to say the reporting requirements were back in effect but that it would give companies additional time to comply (see 2502190066).
Congressional Republicans, who have criticized the BOI rule, welcomed Treasury’s decision to narrow the scope to foreign firms. The department “got it right by focusing on entities of greatest threat to our nation’s security,” Senate Banking Committee Chairman Tim Scott, R-S.C., tweeted.
In contrast, the Financial Accountability & Corporate Transparency Coalition, an advocacy group, said Treasury's decision will undermine efforts to counter the use of anonymous shell companies by foreign adversaries and criminals. The BOI rule is required by the Corporate Transparency Act, and Ian Gary, the coalition’s executive director, said that “hollowing out” the CTA “is an unconstitutional subversion of Congress’ intent that will not survive judicial scrutiny.”
The BOI rule is designed partly to help the government prevent sanctioned parties and others from hiding money or property in the U.S. (see 2312210017). Republican lawmakers have argued that the rule is more complicated than Congress envisioned when it passed the CTA in 2021 (see 2402140044).
Critics also have asserted that many small businesses are unaware of the BOI reporting requirements. The House voted unanimously Feb. 10 to pass a bill by Rep. Zach Nunn, R-Iowa, to extend the filing deadline by a year, to Jan. 1, 2026 (see 2502110032). Scott introduced a companion bill Feb. 11 (see 2502120022).