The US transparency register, the reporting obligations and their legal consequences for foreign owners of US LLCs.
Good news: LLCs formed in the US currently have no obligation to report to the US transparency register. We monitor the legal position for you on an ongoing basis as part of our comprehensive service package. Should the reporting obligation be reintroduced, we will take care of the initial report and every subsequent one for you, at no extra cost.
Where things stand: no reporting obligation for US LLCs
Few US laws have had as curious a career as the Corporate Transparency Act. It came into force on 1 January 2024 and initially required foreign owners of US LLCs, too, to report their details as beneficial owners to the federal agency FinCEN. Then came the courts, the challenges, the chaos. And finally, in March 2025, the U-turn.
Since the FinCEN rule of 21 March 2025, all companies formed in the US and their beneficial owners have been fully exempt from the reporting obligation. This expressly includes LLCs with foreign owners. The only companies still required to report are those formed abroad and registered in a US state.
For you as the owner of a zero-tax LLC, that means: your details are currently in no US federal register. There is no BOI report on you, neither public nor internal to the authorities. The US is therefore more discreet today than before 2024, and certainly more discreet than any EU country with its public transparency register.
Why the subject is still not closed
There are three things you should know before you tick this chapter off:
First: the exemption was initially based on a so-called interim final rule, that is, a provisional regulation. Since 14 August 2026 it has been permanent: FinCEN issued the final rule on 11 August 2026, and it took effect on its publication in the Federal Register. Congress, however, never repealed the law, and in December 2025 the US Court of Appeals for the Eleventh Circuit ruled in National Small Business United v. US Department of the Treasury (No. 24-10736) that the CTA is not unconstitutional as such. The exemption is a political decision, and political decisions can change. That is exactly why we keep monitoring the legal position for our clients.
Second: since 1 January 2026 the state of New York has had its own register under the LLC Transparency Act. It currently applies only to LLCs formed abroad and registered in New York. Our clients are not affected as long as their LLC does not do business in New York.
Third, as always: banks, payment providers and the IRS collect their own data, independently of the transparency register. The exemption from BOI reporting changes nothing about Form 5472, KYC checks or your obligations in your country of residence.
The US transparency register: basics and aims
The US transparency register was a significant step in the fight against money laundering and terrorist financing. It aimed to increase transparency in corporate structures and to disclose beneficial owners.
History and background
The introduction of the US transparency register has its roots in global efforts to combat financial crime. In 2021 the US Congress passed the Corporate Transparency Act in response to international calls for more transparency in the financial system.
This step followed the example of the European transparency registers. The US had long been regarded as a haven for anonymous company formation, which encouraged money laundering and tax evasion.
Responsibility for implementation lies with the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury Department.
The Corporate Transparency Act
The Corporate Transparency Act is the legal basis for the US transparency register. It required certain companies to disclose information about their beneficial owners.
The law applied to US companies and to foreign companies doing business in the US. It particularly affects popular legal forms such as LLCs.
The information to be reported concerned people who exercised substantial control over management or held significant ownership interests.
Aims of the US transparency register
The primary aim of the US transparency register is to combat money laundering and terrorist financing. By disclosing the real owners, it is meant to make shell companies and opaque corporate structures harder to use.
The authorities hope to be able to trace criminal financial flows better. At the same time, the register is meant to curb tax evasion.
Another aim is to strengthen international cooperation in financial supervision. The US transparency register brings the US into line with global standards on corporate transparency.
What it meant for foreign owners of US LLCs
The US transparency register had far-reaching consequences for foreign owners of US LLCs. It brought new obligations and changed how company information is handled.
Reporting obligations and exchange of information
Foreign owners of US LLCs had to provide detailed information about themselves and their holdings. This covered names, dates of birth, addresses and information on the size of the holding.
The data went into the central US transparency register.
For business owners this meant more administrative work. They had to gather the required information and update it regularly.
Failing to meet the reporting obligation could lead to severe penalties, both in the US and in the LLC owner's home country.
Changes to the requirements for beneficial owners
The definition of "beneficial owner" was broadened. It now also covered indirect holdings and means of control.
For LLC owners, this meant checking whether they counted as beneficial owners. That could be the case even with smaller holdings.
The thresholds for reportable holdings were lowered. More people had to disclose their details.
Complex corporate structures became more transparent. The authorities could trace ownership more easily.
What it meant for privacy
The US transparency register restricted the privacy of LLC owners. Information that had previously been confidential became accessible.
For business owners this meant a paradigm shift. The anonymity that LLCs offered was no longer a given.
This could affect business strategies and personal security. Business owners had to weigh up whether a US LLC still met their goals.
Data protection concerns arose from the international exchange of information. The data could become accessible in several countries.
Those affected should inform themselves about their rights and obligations. Professional advice can help to meet the requirements while protecting privacy as well as possible.
Legal framework and obligations
The US transparency register brought new obligations for companies. It required the disclosure of information about beneficial owners and set strict compliance rules.
The role of FinCEN and other agencies
The Financial Crimes Enforcement Network (FinCEN) is at the centre of the US transparency register. This agency is responsible for administering and enforcing the rules.
FinCEN works closely with other US agencies to make the register effective. These include:
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Internal Revenue Service (IRS)
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Securities and Exchange Commission (SEC)
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Department of Justice (DOJ)
These agencies have access to the data held in the register and use it to combat money laundering and terrorist financing.
Due diligence
Companies had to meet strict due diligence obligations to satisfy the requirements of the transparency register. These included:
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Identifying beneficial owners
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Updating the information regularly
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Documenting the due diligence process
The reporting obligations covered detailed information on individuals who directly or indirectly exercise significant control over the company. This also applied to foreign companies doing business in the US.
Meeting the reporting deadlines was particularly important. New companies had to submit their data within 14 days of formation. Existing companies had longer transition periods.
Possible penalties and fines for non-compliance
The US authorities introduced a strict sanctions regime for breaches of the reporting obligations. Possible consequences included:
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Fines of up to USD 10,000 per day for continued non-compliance
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Prison sentences of up to two years for wilful violations
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Civil liability for companies and the individuals responsible
False or misleading information was punished particularly severely. The authorities could also restrict access to bank accounts or revoke business licences.
Companies should take compliance seriously and, where appropriate, seek legal advice to minimise risks.
Consequences for business practice and confidentiality
The US transparency register brought profound changes for foreign owners of US LLCs. It affected company formation, day-to-day business and the handling of sensitive data.
Changes to company formation and business operations
The introduction of the transparency register required business practices to adapt. When forming a US LLC, detailed information about the beneficial owners had to be disclosed. This covered names, dates of birth, addresses and identification numbers.
Existing LLCs were required to submit this data after the fact. Day-to-day business was affected by regular update obligations. Changes in the ownership structure had to be reported promptly.
Similar rules applied to partnerships and other legal forms. The anonymity that many business owners valued was considerably restricted. This could affect business transactions and strategies.
Data protection and publicly accessible information
The transparency register made previously confidential information partly accessible to the public. This concerned the ownership structure of US LLCs in particular.
Banks and insurers gained wider access to this data. That made checks within business relationships easier, but it also created new data protection challenges.
Business owners had to consider what additional steps to take to protect their privacy. The balance between legally required transparency and the protection of sensitive business information was being reset.
Transparency rules and the handling of sensitive data
The new transparency rules required careful handling of sensitive company data. LLC owners had to put processes in place to make sure the information reported was accurate and up to date.
At the same time, internal controls had to be strengthened to restrict access to sensitive data. Training staff in handling confidential information became more important.
Companies should review and adjust their data protection policies. Working with legal advisers can help to minimise compliance risks while safeguarding business interests.
International perspectives and comparisons
The US transparency register sits within a global context of initiatives against money laundering and tax evasion. The rules in the US share some features with the European approaches and differ in others.
The US rules compared with the EU directives
With the 4th and 5th Anti-Money Laundering Directives, the EU introduced strict requirements for transparency registers. They require the disclosure of information such as name, date of birth and the nature of the beneficial interest.
In the US, the Corporate Transparency Act required similar data. One key difference, however, lies in who can access the information. While EU registers are partly open to the public, the US data remains reserved for the authorities.
The thresholds for reportable holdings also vary. In the EU the limit is often 25% of the shares; in the US it was already 25% of revenue or voting rights.
How the US and EU transparency registers relate
The introduction of the US transparency register has implications for cooperation with European authorities. It makes it easier to exchange information in cross-border investigations.
For companies with a presence in both regions, this means potential double reporting obligations. They have to meet both the US and the EU requirements, which increases the administrative burden.
The differences in data protection standards between the US and the EU remain a challenge. European authorities are examining critically whether the US rules meet the strict EU data protection requirements.
International cooperation and exchange of information
The US transparency register promotes international cooperation in the fight against financial crime. It allows information to be exchanged more efficiently between US authorities and their partners worldwide.
The Financial Action Task Force (FATF) welcomes this development as an important step towards global harmonisation of transparency standards. It expects positive effects on the integrity of the international financial system.
Critics, however, warn of possible data protection risks in cross-border information exchange. The balance between transparency and privacy remains a central challenge for the international community.
Practical implementation and compliance
Complying with the US transparency register rules required careful preparation and execution. Companies had to keep accurate documentation, put effective compliance measures in place and, where necessary, seek legal support.
Documentation and reporting requirements
US LLCs had to collect and report detailed information about their beneficial owners. This covered names, dates of birth, addresses and identification numbers. Reports were filed electronically with the Financial Crimes Enforcement Network (FinCEN).
The reporting deadline for existing companies ended on 1 January 2025. New companies had to report within 30 days. Changes had to be updated within 30 days.
Companies should set up a system for recording and updating this data. Thorough documentation of all reports and changes is essential.
Compliance measures for companies
Effective compliance strategies are essential to avoid violations. Companies should define clear responsibilities and train their staff.
Regular internal reviews help to keep the data up to date. A compliance officer can monitor adherence to the rules.
Companies should put processes in place to capture changes quickly. Setting up reminder systems for reporting deadlines is advisable.
Working with tax advisers and lawyers can support compliance efforts. They can help interpret the rules and draw up compliance guidelines.
Support from legal experts
Given the complexity of the rules, professional support is often essential. Lawyers and tax advisers with experience of US law can provide valuable help.
They advise on correctly identifying the people who have to be reported and on interpreting unclear legal terms. Experts also help draw up compliance manuals and training materials.
If you are unsure whether the reporting obligation or possible exemptions apply, legal advice is recommended. Experts can also help with communication with the US authorities.