BOI reporting for companies onboarding international employees

Summary and guidance for blog content: BOI reporting for companies onboarding international employees (US businesses) Executive summary - As of the Financial Crimes Enforcement Network (FinCEN) interim final rule effective March 26, 2025, entities formed in the United States (domestic companies) and U.S. persons are exempt from federal BOI reporting under the Corporate Transparency Act (CTA).

Reporting obligations under FinCEN’s BOI rule now generally apply only to foreign entities that are formed under foreign law and that have registered to do business in any U.S. State or Tribal jurisdiction by filing a document with a secretary of state or similar office (commonly called “foreign reporting companies”).

FinCEN set new short deadlines for those foreign reporting companies to file initial reports and to update/correct previously filed reports (generally 30 days from the IFR publication or 30 days after registration, as applicable).

Key BOI reporting requirements (for reporting companies) - Who must file: under the IFR, reporting companies are now foreign entities that have registered to do business in the U.S. and that do not qualify for an exemption.

Domestic (U.S.-formed) entities are exempt under the March 26, 2025 interim final rule. - Required company-level data: reporting company identification (jurisdiction of formation/registration, principal place of business, tax identification number or foreign tax ID). - Required beneficial owner information: for each beneficial owner the reporting company must report: full legal name, date of birth, residential address, and a unique identifying number and issuing jurisdiction from an acceptable identification document (and an image of that document). - Company applicants: for companies created or registered on or after Jan 1, 2024, limited company applicant reporting rules apply, though the IFR revised scope. - Deadlines and updates: FinCEN’s interim rule extended deadlines for foreign reporting companies to file initial BOI reports and to update or correct reports to 30 days from the IFR publication (for companies registered before March 26, 2025) or 30 days after their registration becomes effective (for registrations on/after March 26, 2025).

Reporting companies must correct or update reports when information changes within the timelines established by FinCEN. Practical implications when onboarding international employees - Distinguish employees vs beneficial owners: ordinary employees (even foreign-national employees) do not necessarily make someone a beneficial owner.

A beneficial owner is an individual who (i) exercises substantial control over the company (officer-level or equivalent control rights) or (ii) owns or controls at least a specified ownership threshold (per BOI/CTA definitions).

When an international hire receives equity, voting rights, or control (or a nominee arrangement that makes them an owner), they can become a beneficial owner and their BOI would need to be reported by the reporting company (if the company is a reportable foreign reporting company).

Employers should assess whether onboarding triggers any ownership/control changes that would require a BOI filing or update. - Acceptable ID and foreign persons: FinCEN requires a “unique identifying number and issuing jurisdiction from an acceptable identification document (and the image of such document).” For foreign individuals, a passport and passport image typically satisfy FinCEN’s acceptable ID requirement; FinCEN’s filing system asks for identifying numbers and images.

If the beneficial owner lacks a U.S. SSN, reporting companies should capture the foreign passport or foreign tax ID and consider advising those individuals on obtaining an ITIN if they need a U.S.

TIN for tax/reporting purposes. - Tax identifier (SSN vs ITIN): Employers should expect to collect SSNs from employees when eligible (SSA/USCIS processes). If a foreign individual is not eligible for an SSN, they may need an ITIN for certain tax reporting or withholding needs.

Employers and reporting companies should follow IRS Form W-7 guidance for ITIN applications (attach tax return unless an exception applies). ITINs are for federal tax purposes only and do not authorize employment.

If an employee is eligible for an SSN (e.g., authorized to work), they should apply with SSA (Form SS-5). - Payroll and withholding interplay: Employers must (1) complete Form I-9 and verify employment authorization and identity for all hires (USCIS I-9 guidance) and (2) handle withholding for nonresident aliens per IRS rules (Publication 515 and Publication 15 guidance).

Nonresident aliens have special W-4 instructions (Notice 1392) and withholding rules; some wages may be subject to different withholding or reported on Form 1042/1042-S if treaty exemptions apply; Form 8233 is used by nonresident aliens to claim treaty exemptions on compensation.

Employers must properly categorize employees (resident vs nonresident for tax withholding) using the IRS rules (substantial presence test, treaty claims) and follow withholding/reporting requirements (Form 941, W-2, 1042-S as applicable). - Record-keeping and privacy: Collecting BOI and identity documents involves highly sensitive PII (names, DOBs, ID numbers, document images).

Employers should limit access, store documents securely, encrypt transmissions (including FinCEN e-filing), and purge or archive data per retention rules. FinCEN requires certification of truthfulness when filing; inaccurate filings can carry penalties.

Use consent and data minimization best practices and consult counsel for cross-border data transfer rules. State-level considerations - Federal change does not automatically eliminate all state-level ownership disclosures.

Some states have their own business registration or beneficial ownership disclosure obligations or corporate transparency indexes — employers and entity managers should check the Secretary of State and state law in jurisdictions where the company is formed or registered.

FinCEN’s IFR explicitly covers federal BOI reporting; state filing obligations (annual reports, ownership disclosures, or state-level BOI programs) remain a separate compliance layer to check per state.

Recommended compliance checklist for employers onboarding international employees

Summary and guidance for blog content: BOI reporting for companies onboarding international employees (US businesses) Executive summary - As of the Financial Crimes Enforcement Network (FinCEN) interim final rule effective March 26, 2025, entities formed in the United States (domestic companies) and U.S. persons are exempt from federal BOI reporting under the Corporate Transparency Act (CTA).

Reporting obligations under FinCEN’s BOI rule now generally apply only to foreign entities that are formed under foreign law and that have registered to do business in any U.S. State or Tribal jurisdiction by filing a document with a secretary of state or similar office (commonly called “foreign reporting companies”).

FinCEN set new short deadlines for those foreign reporting companies to file initial reports and to update/correct previously filed reports (generally 30 days from the IFR publication or 30 days after registration, as applicable).

Key BOI reporting requirements (for reporting companies) - Who must file: under the IFR, reporting companies are now foreign entities that have registered to do business in the U.S. and that do not qualify for an exemption.

Domestic (U.S.-formed) entities are exempt under the March 26, 2025 interim final rule.

- Company applicants: for companies created or registered on or after Jan 1, 2024, limited company applicant reporting rules apply, though the IFR revised scope. - Deadlines and updates: FinCEN’s interim rule extended deadlines for foreign reporting companies to file initial BOI reports and to update or correct reports to 30 days from the IFR publication (for companies registered before March 26, 2025) or 30 days after their registration becomes effective (for registrations on/after March 26, 2025).

Reporting companies must correct or update reports when information changes within the timelines established by FinCEN. Practical implications when onboarding international employees

- Tax identifier (SSN vs ITIN): Employers should expect to collect SSNs from employees when eligible (SSA/USCIS processes). If a foreign individual is not eligible for an SSN, they may need an ITIN for certain tax reporting or withholding needs.

Employers and reporting companies should follow IRS Form W-7 guidance for ITIN applications (attach tax return unless an exception applies). ITINs are for federal tax purposes only and do not authorize employment.

If an employee is eligible for an SSN (e.g., authorized to work), they should apply with SSA (Form SS-5). - Payroll and withholding interplay: Employers must (1) complete Form I-9 and verify employment authorization and identity for all hires (USCIS I-9 guidance) and (2) handle withholding for nonresident aliens per IRS rules (Publication 515 and Publication 15 guidance).

Nonresident aliens have special W-4 instructions (Notice 1392) and withholding rules; some wages may be subject to different withholding or reported on Form 1042/1042-S if treaty exemptions apply; Form 8233 is used by nonresident aliens to claim treaty exemptions on compensation.

Employers must properly categorize employees (resident vs nonresident for tax withholding) using the IRS rules (substantial presence test, treaty claims) and follow withholding/reporting requirements (Form 941, W-2, 1042-S as applicable).

• Required company-level data: reporting company identification (jurisdiction of formation/registration, principal place of business, tax identification number or foreign tax ID).
• Required beneficial owner information: for each beneficial owner the reporting company must report: full legal name, date of birth, residential address, and a unique identifying number and issuing jurisdiction from an acceptable identification document (and an image of that document).
• Distinguish employees vs beneficial owners: ordinary employees (even foreign-national employees) do not necessarily make someone a beneficial owner. A beneficial owner is an individual who (i) exercises substantial control over the company (officer-level or equivalent control rights) or (ii) owns or controls at least a specified ownership threshold (per BOI/CTA definitions). When an international hire receives equity, voting rights, or control (or a nominee arrangement that makes them an owner), they can become a beneficial owner and their BOI would need to be reported by the reporting company (if the company is a reportable foreign reporting company). Employers should assess whether onboarding triggers any ownership/control changes that would require a BOI filing or update.
• Acceptable ID and foreign persons: FinCEN requires a “unique identifying number and issuing jurisdiction from an acceptable identification document (and the image of such document).” For foreign individuals, a passport and passport image typically satisfy FinCEN’s acceptable ID requirement; FinCEN’s filing system asks for identifying numbers and images. If the beneficial owner lacks a U.S. SSN, reporting companies should capture the foreign passport or foreign tax ID and consider advising those individuals on obtaining an ITIN if they need a U.S. TIN for tax/reporting purposes.
• Record-keeping and privacy: Collecting BOI and identity documents involves highly sensitive PII (names, DOBs, ID numbers, document images). Employers should limit access, store documents securely, encrypt transmissions (including FinCEN e-filing), and purge or archive data per retention rules. FinCEN requires certification of truthfulness when filing; inaccurate filings can carry penalties. Use consent and data minimization best practices and consult counsel for cross-border data transfer rules. State-level considerations
• Federal change does not automatically eliminate all state-level ownership disclosures. Some states have their own business registration or beneficial ownership disclosure obligations or corporate transparency indexes — employers and entity managers should check the Secretary of State and state law in jurisdictions where the company is formed or registered. FinCEN’s IFR explicitly covers federal BOI reporting; state filing obligations (annual reports, ownership disclosures, or state-level BOI programs) remain a separate compliance layer to check per state. Recommended compliance checklist for employers onboarding international employees

Determine entity status

is the company a U.S. domestic entity (now exempt under IFR) or a foreign entity registered to do business in the U.S. (likely a reporting company)? If foreign reporting company, confirm whether any BOI exemptions apply.

Identify whether the new hire changes beneficial ownership or control

equity grants, voting rights, nominee arrangements, or new officers with substantial control. If yes and you are a reporting company, plan to file or update BOI.

Collect BOI-ready information from any beneficial owners and company applicants

full legal name, date of birth, residential address, acceptable ID type and unique number (passport, foreign TIN, SSN/ITIN if available), and a high-quality image of the ID where required. Store securely.

For employees

complete Form I-9 and collect acceptable documents showing identity and employment authorization. Retain I-9 for 3 years after hire or 1 year after termination (whichever later). If participating in E-Verify, follow E-Verify procedures. 5. For payroll tax classification: obtain Form W-4 with NRA-specific instructions if applicable; determine residency status (substantial presence test), apply withholding rules from IRS Pub 515 and Pub 15; file/withhold on Form 941, W-2, 1042-S/1042 as required, and handle treaty claims via Form 8233. 6. If individuals need a U.S. TIN: advise on SSN application (if eligible) via SSA (Form SS-5) or ITIN via IRS Form W-7 (attach tax return or exception documentation). ITIN issuance can take time — plan payroll and withholding accordingly.

File BOI reports via FinCEN’s BOI e-filing system when required; consider using a FinCEN ID or third-party filing services; certify accuracy. Monitor deadlines and update information when ownership/control changes.

Maintain data security, limit access, and coordinate with legal/tax counsel for complex cross-border or treaty issues. Document internal processes and training for HR and finance teams.