Family Office Insights - An update on beneficial ownership reporting requirements | Insights

The Corporate Transparency Act has been significantly narrowed since BOI reporting requirements first took effect in January 2024. On March 26, 2025, FinCEN issued an interim final rule, effective upon Federal Register publication that day, that removed domestic reporting companies from the definition of "reporting company." According to Squire Patton Boggs, the rule was intended to reduce compliance burdens on US businesses while keeping national security and law enforcement objectives through a more targeted framework focused on foreign entities operating in the US.

For most family offices, the threshold question is now whether a foreign entity qualifies as a "foreign reporting company": one formed under foreign law that registers to do business in a US state or tribal jurisdiction through a filing with a secretary of state or similar office. Reporting turns on where an entity is organized and whether it is registered in the US, not on ultimate ownership, so a domestic subsidiary is generally not subject to reporting even if wholly foreign-owned. The firm cautions that foreign parents should still evaluate whether US activities could trigger state-law registration that would bring them into scope.

Squire Patton Boggs cites examples that may still trigger reporting, including a Cayman Islands holding company registered in Delaware, a Luxembourg investment vehicle registered to conduct US business, and a UAE family office management company with a Florida registration. Examples generally outside the regime include a Delaware LLC holding family investments, a domestic family office management company, and a foreign vehicle that merely holds passive interests in US funds without state registration.

The statutory exemptions remain in place. Relevant exemptions for family offices include the large operating company exemption, the SEC-regulated and investment adviser exemptions, the pooled investment vehicle exemption, the tax-exempt entity exemption, and the subsidiary exemption. For entities still subject to reporting, FinCEN requires company details and information on beneficial owners who are not US persons, including anyone owning or controlling at least 25 percent of the entity or exercising substantial control. Substantial control can extend to senior officers, trustees, protectors, and other decision-makers even with little or no equity.

Congress has also moved to scale back the CTA through S. 4419, introduced in April 2026, and H.R. 425, the Repealing Big Brother Overreach Act, introduced in January 2025. Both would repeal or substantially limit reporting for many privately held entities, though their passage is uncertain. On June 5, 2026, OMB's Office of Information and Regulatory Affairs received a copy of FinCEN's final rule for review, and the interim rule remains in effect until that review concludes.