From the SEMA Washington, D.C., office
The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) recently issued a final rule that permanently eliminates the requirement that American companies and individuals must report the beneficial ownership information of their business to FinCEN under the Corporate Transparency Act (CTA), a 2021 federal law intended to enhance transparency in entity structures and ownership to combat money laundering, tax fraud and other illicit activities. The final rule, which took effect on August 14, 2026, requires foreign entities to report their beneficial ownership information (BOI) for foreign individuals.
- The automotive aftermarket has long advocated for policies that allow small businesses to spend less time navigating unnecessary regulatory burdens and more time investing in their businesses and employees. Treasury's final BOI rule moves in that direction by permanently eliminating a federal reporting requirement for U.S. companies and U.S. persons.
The U.S. Treasury Department estimates that the changes in the final rule will eliminate approximately $9 billion in annual compliance costs for small businesses and reduce the reporting burden by approximately 53 million hours per year compared with the previous framework.
Key Provisions in Beneficial Ownership Final Rule:
- Adopts the exemptions set out in the interim final rule issued in March 2025, making the rollback of BOI reporting by American companies permanent.
- Exempts American persons who have obtained FinCEN IDs from any obligation to update or correct the information they originally provided to FinCEN to obtain their FinCEN IDs.
- Eliminates the requirement for foreign companies to report American person "company applicants" (i.e., the individuals who helped those foreign companies register to do business in the United States).
- Exempts foreign pooled investment vehicles registered in the United States from reporting the BOI of an American person in control of the investment vehicle.
- Confirms that FinCEN will delete information about any individuals––company applicants, beneficial owners or recipients of a FinCEN ID––that FinCEN reasonably believes is a U.S. person (e.g., the information is linked to a U.S. passport or U.S. driver's license).
Under the final rule, foreign entities that are reporting companies will still be required to report BOI for foreign individuals.
In addition to the final rule, FinCEN has issued Frequently Asked Questions and will be updating guidance on FinCEN.gov to reflect the final rule.
A Win for Small-Business Regulatory Relief
For the independent repair shop owner, specialty-parts manufacturer, distributor, performance business or motorsports company, the takeaway is simple: If your business is organized in the United States, you generally no longer need to file BOI with FinCEN.
Businesses with foreign corporate structures should still review the rule carefully to determine whether they fall within the remaining reporting requirements. And all businesses should continue to comply with other applicable federal, state and local requirements.
Questions? Contact SEMA Senior Manager for Federal Government Affairs Juan Mejia at JuanM@sema.org.
