BOI stands for beneficial ownership information, and it is a new reporting requirement businesses registered in the United States must meet.
However, does that include businesses owned or controlled by foreigners? Below, we will answer that question.
What is a BOI Report and Why is it Important?
A BOI report is a document that contains information about the individuals who ultimately own or control a reporting company. A reporting company is any entity that is created or registered in the United States, or that operates in the United States, and that meets certain criteria.
The BOI report must include the name, date of birth, address, and a unique identification number of each beneficial owner and applicant of the reporting company.
A beneficial owner is any individual who owns 25% or more of the equity interests of the reporting company, or who exercises substantial control over the reporting company.
A company applicant is any individual who files a document to create or register the reporting company or to obtain authorization to do business in the United States.
The purpose of the BOI reporting rule is to prevent the misuse of legal entities for illicit activities, such as money laundering, tax evasion, fraud, terrorism, and human trafficking.
By collecting and maintaining beneficial ownership information, FinCEN aims to enhance the transparency and accountability of the financial system and to assist law enforcement and national security agencies in detecting and combating crime.
Who Needs to File a BOI Report and When?
The BOI reporting rule applies to any reporting company that is owned or controlled by a foreigner, regardless of their nationality, residence, or citizenship. However, certain types of entities, such as banks, credit unions, and insurance companies, are exempt. You can find the full list of exempt entities on the FinCEN website.
If you are not sure whether your entity qualifies as a reporting company or an exempt entity, you should consult with a qualified attorney who can advise you on your specific situation.
The deadline for filing a BOI report depends on when your entity was created or registered.
- If your entity was created or registered before January 1, 2024, you have until December 31, 2024, to file your initial BOI report.
- If your entity was created or registered on or after January 1, 2024, you have 90 days from the date of creation or registration to file your initial BOI report.
How Do You File a BOI Report?
To file a BOI report, you need to use the BOI E-Filing System, which is an online platform that allows you to submit and manage your BOI reports electronically. You need to create an account and provide some basic information about your company, such as its name, address, and jurisdiction of formation.
You also need to upload a copy of an identification document of each beneficial owner and applicant of your entity, such as a passport, driver’s license, or ID card.
Filing a BOI report may pose some challenges for foreign-owned or controlled entities, especially if they have complex ownership structures or operate in multiple jurisdictions.
Some of the challenges include:
- Identifying and verifying the beneficial owners and applicants of your entity, especially if they are located in different countries.
- Obtaining the consent and cooperation of the beneficial owners and applicants of your entity, especially if they are not aware of or interested in the BOI reporting rule.
- Protecting the beneficial ownership information, especially if it is sensitive or confidential.
To overcome these challenges, you may need to seek professional assistance from a FinCEN Compliance Lawyer who can help you with the BOI reporting process.
What are the Benefits of Filing a BOI Report?
Filing a BOI report may have some benefits for your entity, such as:
- Enhancing your reputation and credibility as a legitimate and transparent business.
- Reducing your risk of being involved in or associated with illicit activities or transactions.
- Improving your access to financial services and markets, especially in the United States.
- Supporting the global efforts to combat crime and corruption.
What Happens If You Do Not File a BOI Report?
Failing to file a BOI report or filing a false or incomplete BOI report may have serious consequences, such as:
- Facing civil and criminal penalties, such as fines of up to $500 per day or imprisonment of up to two years.
- Losing your eligibility for federal contracts, grants, or loans.
- Being subject to investigations, audits, or sanctions by FinCEN or other authorities.
- Damaging the reputation and trustworthiness of your business.
Therefore, it is important that you file your BOI report accurately and timely and that you update it whenever there is a change in the beneficial ownership information of your entity.
We Can Help You
You may have more questions or concerns about how the BOI reporting rule affects your business. That is why we are here to help you.
At Jurado & Associates, P.A., we have extensive experience and expertise in helping foreign-owned entities comply with legal requirements in the United States.
We can help you:
- Determine whether your entity is a reporting company or an exempt entity under the BOI reporting rule.
- Identify and verify the beneficial owners and applicants of your entity.
- Obtain the consent and cooperation of the beneficial owners and applicants of your entity.
- File and update your BOI report with FinCEN.
- Protect your beneficial ownership information.
If you are interested in working with us, or if you have any questions about the BOI reporting rule, please do not hesitate to contact us. You can reach us by phone at (305) 921-0976, by email at [email protected], or by WhatsApp at +1 (305) 921-0976.
We are ready and eager to help you and your business succeed and thrive in the United States.