FinCEN: Final Rule on Company Beneficial Ownership Reporting

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The US Department of the Treasury’s Financial Crimes Enforcement Network  has issued a final rule requiring companies to report their beneficial ownership information. This rule aims to target only foreign companies. A foreign company means a legal entity of any type, which is formed outside the US and registered to do business in the US. The updated FinCEN regulation confirms that domestic companies (i.e. companies registered in the US) are exempted from filing company beneficial ownership report.

A beneficial owner of a company is an individual who directly or indirectly manages a company and makes the most important decisions (e.g. a shareholder in most of the cases). Introduced exemptions also apply towards foreign companies where one or more beneficial owners are US citizens. In that case a foreign company would be required to submit beneficial ownership reporting only with regards to beneficiaries who are non-US citizens. Suggested regulation is aimed to enhance security and combat money laundering,  and other illicit activities by increasing transparency in company ownership.

The deadline for submission of report is to be determined yet. As a general rule foreign entities will have 30 days from the date of publication to make the necessary filing.