Introduction
Starting in 2024, businesses operating in the U.S. will face new filing requirements under the Corporate Transparency Act (CTA), which mandates that companies submit a Beneficial Ownership Information (BOI) report. This new regulation applies to both domestic and foreign-owned entities, making it critical for foreign nationals who own businesses in the United States to understand the implications. In this blog, we’ll explain what the BOI report is, who must file it, and how these requirements apply to foreign business owners.
What is the Beneficial Ownership Information (BOI) Report?
The Beneficial Ownership Information (BOI) report is a key component of the Corporate Transparency Act (CTA), which aims to increase transparency and prevent illegal activities like money laundering and tax evasion. Starting January 1, 2024, most companies operating in the U.S. will be required to file a BOI report with the Financial Crimes Enforcement Network (FinCEN), disclosing key information about the individuals who own or control the business.
Who Must File a BOI Report?
The BOI reporting requirements apply to most small and medium-sized U.S. businesses, including:
- Corporations: Domestic or foreign-owned corporations operating in the U.S.
- Limited Liability Companies (LLCs): Domestic and foreign-owned LLCs doing business in the U.S.
- Other Entities: Limited partnerships, business trusts, and similar entities must also comply.
Businesses that are exempt include large companies with over 20 employees and $5 million in annual revenue, as well as publicly traded companies.
What Information Must Be Reported?
When filing a BOI report, businesses must provide the following information:
- Company Information: Full legal name, business address, state of incorporation, and tax identification number (TIN).
- Beneficial Owners’ Information:
- Full legal name
- Date of birth
- Residential address
- A unique identification number from a government-issued document (such as a passport or driver’s license)
- Control Information: Information about individuals who exercise substantial control over the business, such as directors, managers, or partners.
How Does This Apply to Foreign Nationals Who Own U.S. Businesses?
Foreign nationals who own or control U.S. businesses are also subject to BOI filing requirements. If you’re a foreign national with a U.S.-registered business, you’ll need to disclose personal information similar to that required from U.S. citizens. Here’s how this applies:
- Foreign-Owned LLCs and Corporations: If you own or have substantial control over an LLC or corporation in the U.S., you must file a BOI report, disclosing your beneficial ownership details. This includes submitting your full legal name, date of birth, residential address, and a unique identification number (such as a passport).
- Compliance with U.S. Regulations: Foreign nationals operating U.S. businesses must comply with all U.S. business laws, including BOI filing. Failure to file could lead to severe penalties, including fines or legal action.
- Registered Agents: If your business is foreign-owned, you may use a registered agent in the U.S. to help you file the necessary BOI reports and ensure compliance with federal regulations.
Why is the BOI Report Important?
The Beneficial Ownership Information report is crucial for maintaining transparency in U.S. business operations. It ensures that FinCEN and other regulatory bodies can identify individuals behind business entities, preventing the use of shell companies for illicit activities. For foreign nationals, proper BOI filing also demonstrates a commitment to operating within U.S. legal frameworks, helping to build credibility and trust with business partners and regulators.
Penalties for Non-Compliance
Non-compliance with BOI reporting requirements can result in significant consequences for U.S. businesses and their owners. Penalties include:
- Civil Penalties: Fines of up to $500 per day for each day the report is not filed.
- Criminal Penalties: In severe cases, individuals can face fines of up to $10,000 or imprisonment for up to two years.
How an Immigration and Business Lawyer Can Help
Navigating the BOI filing requirements, especially as a foreign national, can be challenging. Working with an experienced immigration and business lawyer in Georgia can help ensure that you meet all U.S. business compliance regulations, avoiding penalties and ensuring the smooth operation of your business. An attorney can assist with:
- Understanding Filing Requirements: Clarifying whether your business needs to file a BOI report and helping you gather the required information.
- Filing the BOI Report: Assisting with the accurate and timely submission of your BOI report.
- Ongoing Compliance: Ensuring that your business remains compliant with all U.S. laws, including any updates to the BOI filing process.
Conclusion
The new Beneficial Ownership Information (BOI) filing requirements are a significant change for U.S. businesses, including those owned by foreign nationals. By understanding the reporting obligations and working with a qualified immigration and business lawyer, you can ensure that your business stays compliant with federal regulations. Contact our law firm today for expert assistance with BOI filings and all your business immigration needs.
Is your business ready for the new BOI filing requirements? Contact our experienced immigration and business lawyers in Georgia for personalized guidance and ensure your compliance with U.S. regulations. Schedule a consultation today!
