Ashford International Law P.C.

When the Corporate Transparency Act took effect on January 1, 2024, nearly every company formed in the United States, and every foreign company registered to do business in a state, had to report its beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department. FinCEN estimated that 32.6 million companies would report. The obligation has since been reduced to a small group: companies formed under foreign law that register in a U.S. state, and the non-U.S. individuals who own or control them.

For foreign families and business owners with American structures, the narrowing is less of a release than it appears. The companies that still file are largely the foreign holding companies, blockers and trust companies that international families use, and the other channels through which authorities learn who owns a structure remain in place. This article sets out the position as of September 2026.

Summary

1. Since August 14, 2026, U.S. companies file nothing with FinCEN. Only entities formed under foreign law and registered in a U.S. state still report, and only their non-U.S. beneficial owners.
2. Registration in a state, not the ownership of U.S. assets, triggers the obligation.
3. The position is not settled: two petitions are before the Supreme Court, and Congress and the Government Accountability Office point in opposite directions.
4. Banks and brokers still identify the owners of every company that opens an account, under a separate rule the final rule does not touch.
5. New York requires foreign-formed LLCs authorized there to file by December 31, 2026; the IRS learns the foreign owner of every foreign-owned single-member LLC through Form 5472; and the vacated real estate reporting rule may return on appeal.
6. The Common Reporting Standard reports the owners of a U.S. company’s foreign bank accounts to the family’s home country. No structure provides anonymity from tax authorities.

Part I. How the rule arrived where it is, and what is still pending

The Corporate Transparency Act (31 U.S.C. § 5336) was enacted on January 1, 2021. The database it created has never been public; it is open to law enforcement and intelligence agencies, to foreign authorities through a federal agency, and, with the company’s consent, to banks. After nationwide injunctions in late 2024 and early 2025, the Treasury Department announced on March 2, 2025 that it would not enforce the statute against U.S. companies or U.S. citizens. FinCEN’s interim final rule of March 26, 2025 removed domestic companies from the obligation, and its final rule, issued on August 11, 2026 and effective August 14, 2026 (91 Fed. Reg. 52508), made that permanent. The final rule also stopped the reporting of U.S. persons who file a foreign company’s state registration, relieved U.S. holders of FinCEN identifiers of the duty to update them, and committed FinCEN to deleting the information already collected on U.S. companies and persons. Such information included in a filing made after February 10, 2027 will not be deleted.

The final rule is an administrative choice, and it can be reversed. The Eleventh Circuit upheld the statute on December 16, 2025, and two petitions (National Small Business United v. Bessent, No. 25-1201, and Texas Top Cop Shop, Inc. v. Blanche, No. 25-1290) are distributed for the Supreme Court’s conference of September 28, 2026. H.R. 425, reported by the House Financial Services Committee on April 21, 2026 by a vote of 26 to 25, and S. 4419 would write the foreign-only rule into the statute; neither has passed. On the other side, the Government Accountability Office reported on May 29, 2026 that the exemptions remove more than 99 percent of the entities that previously reported and recommended that FinCEN address the gap (GAO-26-107967); the Treasury Department disagreed.

Part II. Who still files, what, and when

A reporting company is now only a “foreign reporting company”: an entity formed under the law of a foreign country and registered to do business in a U.S. state by a filing with a secretary of state or similar office (31 C.F.R. § 1010.380). A German GmbH that registers in Delaware to operate an American branch reports. A British Virgin Islands company that owns a brokerage account or a condominium in the United States without registering anywhere does not. The surviving exemptions, for banks, insurers, tax-exempt entities and large operating companies, occasionally cover a family’s operating business and almost never its holding company.

The report gives each beneficial owner’s name, date of birth, residential address and identity document. A beneficial owner is any individual who owns or controls 25 percent or more of the company, or who exercises substantial control over it. Substantial control does not depend on ownership: it reaches senior officers, anyone who can appoint or remove officers or directors, and anyone with substantial influence over important decisions, which in a family structure can include a protector or a relative whose consent is required.

U.S. persons are not reported. The exclusion follows the income tax definition (26 U.S.C. § 7701(a)(30)), so it covers green card holders and residents under the substantial presence test as well as citizens. A child who has become a U.S. tax resident drops out of the filing, and a later change of status brings the child back in.

A foreign company files within 30 days after its registration becomes effective. Any change in the reported information requires an update within 30 days, and an error must be corrected within 30 days of its discovery. Willful violations carry a civil penalty of up to $606 per day and criminal penalties of up to $10,000 and two years’ imprisonment.

Part III. What the rule means for family structures

Ownership through a trust is traced, not blocked. Where a trust holds an interest in a registered foreign company, the persons reported are the trustee and anyone else with power to dispose of the trust assets, a beneficiary entitled to all income and principal or able to withdraw substantially all of the assets, and a settlor who can revoke the trust. A trust itself is never a reporting company, because it is not created by a state filing.

For estates, an heir whose only interest is a future right of inheritance is not reported, and when a reported owner dies, the change is treated as occurring when the estate is settled. The 30-day update therefore runs from settlement, not from the date of death, and the executor or successor trustee should know that the filing falls to them.

The largest change concerns private trust companies. A family trust company formed in South Dakota, Nevada or Wyoming was usually a reporting company under the 2024 rule and now files nothing. A foreign trust company or corporate trustee that registers in a state still reports, and its governance is exactly what the substantial control test examines. Holding structures themselves are discussed on the firm’s page on planning for nonresidents with U.S. assets.

Sources: 31 C.F.R. § 1010.380 as amended by 91 Fed. Reg. 52508 (Aug. 14, 2026); 31 C.F.R. § 1010.230; 26 U.S.C. §§ 6038A, 6048.

Part IV. The bank still asks

The customer due diligence rule (31 C.F.R. § 1010.230) is unaffected by the final rule. Banks, broker-dealers and similar institutions must identify and verify, for every company that opens an account, each individual who owns 25 percent or more and one individual who controls it; where a trust holds 25 percent or more, the trustee is recorded. The rule applies to U.S. and foreign companies alike and has no exclusion for U.S. persons. A FinCEN order of February 13, 2026 (FIN-2026-R001) lets institutions rely on information already on file when an existing customer opens another account, which changes how often the information is verified, not whether it is collected. The bank’s file is now the most complete record of who owns a U.S. company, and it is available to the government through examinations, subpoenas and suspicious activity reports.

Part V. New York, the real estate rule and the IRS

New York’s LLC Transparency Act took effect on January 1, 2026. Because it borrows the federal definitions, it now reaches only LLCs formed under the law of a foreign country and authorized to do business in New York. Those authorized before 2026 must file a beneficial ownership disclosure with the Department of State by December 31, 2026, new ones within 30 days, and all of them annually. U.S. beneficial owners are not reported, exempt companies file an attestation, and the database is not public. A company that does not file is listed as past due and can be suspended; after two years it is delinquent, and civil penalties of up to $500 a day may be sought.

FinCEN’s residential real estate rule required a report of the beneficial owners of any company or trust buying a U.S. home without bank financing. It took effect on March 1, 2026 and was vacated nationwide on March 19, 2026 (Flowers Title Companies, LLC v. Bessent, E.D. Tex.). FinCEN has appealed to the Fifth Circuit, and a Florida federal judgment upholding the rule is under review in the Eleventh Circuit. No report is due while the vacatur stands, and none will be required later for closings in the meantime, but a reversal would restore the rule for later closings.

The IRS never depended on the Corporate Transparency Act. A U.S. single-member LLC owned by a foreign person files Form 5472 with a pro forma Form 1120 every year, naming its foreign owner, under a penalty of $25,000 per failure plus $25,000 for each further 30 days after notice (26 U.S.C. § 6038A). A treaty partner can request that information under its income tax treaty.

Sources: 31 U.S.C. § 5336; 31 C.F.R. §§ 1010.230, 1010.380, 1031.320; N.Y. Limited Liability Company Law §§ 1106 to 1108; 26 U.S.C. §§ 6038A, 6038C.

Part VI. What the family’s home country learns

Under FATCA, foreign banks report the accounts of U.S. persons to the IRS. In return, under the reciprocal agreements the United States has with most of Western Europe and with Canada, the IRS sends the partner country the identity of its residents who hold accounts at U.S. banks, with the interest and U.S.-source income paid to them. It sends no balances and does not look through a U.S. company to its owners.

The Common Reporting Standard, in which the United States does not take part, goes further. Financial institutions in more than one hundred countries report accounts held by residents of other participating countries and, for passive companies and trusts, their controlling persons, including the owners of a U.S. LLC that holds an account abroad. A German family’s Delaware LLC with an account in New York is therefore not reported to Germany at all; the same LLC’s account in Zurich is reported to Germany with the family members named.

Sources: U.S. Department of the Treasury, FATCA Resource Center; Swiss State Secretariat for International Finance; OECD, automatic exchange commitments.

The home country’s tax authority thus sees the family’s accounts outside the United States in full, its residents’ direct U.S. accounts in part, and accounts held by U.S. companies only on request.

Part VII. Practical steps

1. Keep a current ownership file for every structure, tracing ownership to individuals, listing officers, protectors and veto holders, and recording who is a U.S. person and why. The same file answers the bank, the closing agent and, if the rule widens, FinCEN.
2. Review every state registration of a foreign entity. Registrations that nothing requires can be withdrawn; a new one should be a deliberate decision.
3. Name the person responsible for updates, since trustee changes, distributions, deaths and moves to or from the United States can each change a filing.
4. Diarize the settlement of any estate holding an interest in a registered foreign company.
5. File in New York by December 31, 2026 for any foreign-formed LLC authorized there before 2026.
6. Prepare cash purchases of U.S. homes as if the real estate rule applied.
7. Describe privacy planning accurately. Structures keep names off public registers and separate liability; they do not keep ownership from tax and law enforcement authorities.

Conclusion

The final rule of August 2026 did not end beneficial ownership disclosure. It changed which authority collects the information and left the federal obligation where international families are most likely to meet it: at the foreign holding company, blocker or trust company registered in a U.S. state. Companies that no longer report to FinCEN remain known to their banks, to the IRS, to New York where applicable, and to the family’s home country. With the Supreme Court, Congress and two courts of appeals still to act, the sound course is to comply exactly with what is in force and to keep every structure’s records ready for a broader rule.

How the firm helps

Ashford International Law PC advises foreign families, business owners and fiduciaries on the reporting obligations of their U.S. structures, including reviews of state registrations, Corporate Transparency Act and New York filings, trust attribution analyses and Form 5472 compliance. Related material covers tax compliance, planning for nonresidents with U.S. assets and beneficial ownership reporting in the glossary. Advisors will find the firm’s 20-page guide, FinCEN Beneficial Ownership Reporting for Cross-Border Structures under the Corporate Transparency Act after the August 2026 Final Rule, in the For Advisors section of the Articles and Guides page.

The articles are intended for information purposes only. They should not be construed as legal advice. For a comprehensive evaluation of your individual situation please contact us at (202) 790-2500 or at info@internationalestatelaw.com for an Initial Consultation Package.

This article describes general principles and is not legal or tax advice. The treatment of a particular structure depends on its facts, on the entities, states and countries concerned, and on the law in effect at the relevant time. The rules described have changed repeatedly since 2024 and are the subject of pending litigation and legislation; statuses are stated as of September 2026.