Nationwide Halt to the Corporate Transparency Act: What Nonresident US Company Owners Need to Know

The Corporate Transparency Act (CTA) has been a looming concern for many U.S. business owners, especially nonresidents who have set up their companies in the United States. This law aims to prevent the misuse of anonymous shell entities for illicit purposes—such as money laundering, tax evasion, and terrorism financing—by requiring companies to report their Beneficial Ownership Information (BOI) to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

However, the path to CTA enforcement just took an unexpected turn. On December 3, 2024, a federal judge in Texas issued a nationwide preliminary injunction against enforcing the CTA. With the January 1, 2025, reporting deadline right around the corner, millions of companies, including those owned by non-U.S. residents, now face uncertainty about whether to file their BOI reports.

What Is the CTA and Who Must Comply?

If you are a nonresident who has formed or registered a U.S. company, the CTA likely applies to you. The law essentially requires reporting of key information about the company’s “beneficial owners”—the individuals who ultimately own or control it. For small, nonresident-owned businesses, this can mean disclosing personal details to the government, including names, addresses, and identifying documentation.

Prior to the injunction, if your company was formed before 2024, you were expected to file a BOI report by January 1, 2025. Failure to comply could result in steep civil and even potential criminal penalties.

What the Nationwide Injunction Means for You

The nationwide injunction issued by Judge Amos L. Mazzant of the Eastern District of Texas has effectively paused the enforcement of the CTA and FinCEN’s BOI reporting rule—for now. This means that, as of this writing, companies are not legally required to meet the January 1, 2025, filing deadline. The Department of Justice is appealing the injunction, so it is possible this decision will be reversed, upheld, or modified on appeal.

For nonresident-owned companies, this reprieve may seem welcome, but it also introduces uncertainty. Will the injunction remain in place long enough to permanently delay reporting? Or will it be overturned soon, requiring you to file at short notice?

Key Takeaways for Nonresident Company Owners:

1. Deadline in Limbo:

While the injunction stands, you are not currently required to file a BOI report by the January 1, 2025, deadline. However, this situation could change rapidly if the appeals court issues a stay or overturns the injunction. Keep an eye on developments over the coming weeks and months.

2. Keep Preparing Your Documentation:

Even though the requirement is on hold, it’s wise to continue organizing your beneficial ownership information. That way, if the injunction is lifted and deadlines are reinstated, you will be ready to file without the panic of last-minute compliance.

3. Stay Informed About Legal Developments:

The CTA’s fate now rests, in part, with appellate courts. There are multiple ongoing cases challenging the law’s constitutionality. Because these disputes are unfolding in different jurisdictions, the legal landscape may shift quickly.

4. Consider Professional Guidance:

For nonresident owners, navigating U.S. regulations can be challenging, especially amid uncertainty. Having professional support ensures that you remain compliant with changing rules and deadlines.

What’s Next?

The government has already appealed the Texas injunction, and higher courts will weigh in soon. It’s possible that FinCEN may issue temporary guidance or delay enforcement. The situation is dynamic, and changes could come quickly.

For now, we recommend a “watchful waiting” approach—stay prepared but don’t rush to file. Continue to monitor updates from authoritative sources, and consider seeking professional advice to stay ahead of the curve.

How Nonresident Tax Can Help

At Nonresident Tax, we specialize in supporting nonresident business owners in the U.S. Our all-in-one solutions simplify compliance—from setting up your company and managing annual filings to guiding you through complex new laws like the CTA. We keep a close watch on legislative and regulatory changes, so you don’t have to.

If the injunction is lifted, we will help you prepare and submit your BOI report promptly and accurately. If new deadlines or regulations emerge, our dedicated team will ensure you understand your responsibilities well in advance. Our goal is to give you peace of mind, allowing you to focus on growing your U.S. business while we handle the details.

Your company’s compliance shouldn’t be a source of stress—let Nonresident Tax keep you informed, prepared, and confident, no matter how the CTA landscape evolves.