FinCEN Beneficial Ownership Reporting: 2025 Compliance Checklist for Turkish Companies

The Corporate Transparency Act (CTA), enacted as part of the National Defense Authorization Act for Fiscal Year 2021, created a new federal beneficial ownership reporting regime administered by the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

The CTA requires most U.S. corporations, LLCs, and similar entities to report information about their beneficial owners — the individuals who ultimately own or control the company — to FinCEN. The stated purpose is to combat money laundering, terrorist financing, and other illicit financial activities that exploit anonymous shell companies.

For Turkish companies with U.S. subsidiaries or operating entities, the CTA creates compliance obligations that must be understood and addressed.

If your company was formed before January 1, 2024 and has not yet filed, you are already past the deadline and should file immediately to limit penalty exposure.

A reporting company is any entity that is:

1. A corporation, LLC, or other similar entity
2. Created by filing a document with a secretary of state or similar office (in the U.S. or a U.S. territory)
3. Not exempt under one of the 23 statutory exemptions

The most relevant exemptions for Turkish-owned U.S. entities include:

Large operating company exemption: Entities that:

• Employ more than 20 full-time employees in the United States
• Have an operating presence at a physical office within the United States
• Filed a federal income tax return for the prior year showing more than $5 million in gross receipts or sales

Subsidiary exemption: Entities whose ownership interests are controlled or wholly owned, directly or indirectly, by one or more exempt entities (with certain exceptions)

Inactive entity exemption: Entities that:

• Were in existence on or before January 1, 2020
• Are not engaged in active business
• Are not owned by a foreign person
• Have not experienced ownership changes in the preceding 12 months
• Have not sent or received funds exceeding $1,000 in the preceding 12 months
• Do not hold any assets

Important: Most Turkish-owned U.S. holding companies, special purpose vehicles, and small operating subsidiaries will not qualify for any exemption and must file.

A beneficial owner is any individual who, directly or indirectly:

• Exercises substantial control over the reporting company, OR
• Owns or controls at least 25% of the ownership interests of the reporting company

An individual exercises substantial control if they:

• Serve as a senior officer (president, CEO, CFO, COO, general counsel, or any officer who performs a similar function)
• Have authority to appoint or remove any senior officer or a majority of the board of directors
• Direct, determine, or have substantial influence over important decisions of the reporting company
• Have any other form of substantial control over the reporting company

Ownership interests include:

• Equity interests (shares, membership interests, partnership interests)
• Capital or profit interests
• Convertible instruments
• Options, warrants, or other rights to acquire equity
• Any other instrument, contract, or mechanism used to establish ownership

Beneficial ownership is traced through ownership chains. A Turkish individual who owns 100% of a Turkish holding company that owns 100% of a U.S. LLC is a beneficial owner of the U.S. LLC — even though they hold no direct interest in the U.S. entity.

• Full legal name
• Any trade names or "doing business as" names
• Current street address of principal place of business in the U.S. (or, if none, the primary location where business is conducted)
• State, tribal, or foreign jurisdiction of formation
• IRS Taxpayer Identification Number (TIN) or EIN

• Full legal name
• Date of birth
• Current residential street address
• Unique identifying number from an acceptable identification document:
  • U.S. passport
  • State-issued driver's license or ID
  • Foreign passport (if no U.S. document is available)
• Image of the identification document

• Same information as beneficial owners
• For entities formed by a third-party filer (e.g., a law firm or registered agent), both the individual who filed the formation document and the individual who directed the filing must be reported

• Compile a complete list of all U.S. entities in which Turkish individuals or entities hold interests
• Include corporations, LLCs, limited partnerships, and other entities formed by filing with a state
• Note the state of formation and date of formation for each entity
• Identify entities formed before January 1, 2024 (existing entities) vs. those formed after

For each entity:

• Review all 23 CTA exemptions
• Document the basis for any claimed exemption
• Note that exemption status must be re-evaluated if the entity's circumstances change
• For entities claiming the large operating company exemption, verify all three prongs are satisfied

For each non-exempt reporting company:

• Identify all individuals who own 25% or more of the entity (directly or indirectly)
• Identify all senior officers (president, CEO, CFO, COO, general counsel)
• Identify any other individuals who exercise substantial control
• Trace indirect ownership through all intermediate entities
• Document the analysis supporting each beneficial owner determination

For each beneficial owner:

• Collect full legal name (as it appears on identification documents)
• Collect date of birth
• Collect current residential address
• Collect copy of acceptable identification document
• Verify that the identification document is current and not expired

• Access the FinCEN BOI E-Filing System at boiefiling.fincen.gov
• Complete the Beneficial Ownership Information Report (BOIR) for each reporting company
• Submit the report and retain the confirmation number
• Store copies of all filed reports and supporting documentation

• Establish a process to monitor for changes in beneficial ownership
• Calendar 30-day deadlines for reporting changes
• Assign responsibility for ongoing BOI compliance to a specific individual
• Include BOI compliance in onboarding procedures for new U.S. entities
• Review exemption status annually

A Turkish corporation or LLC that owns a U.S. entity is not itself a reporting company (it was not formed by filing with a U.S. state). However, the Turkish parent's ultimate beneficial owners — the Turkish individuals who own or control the Turkish parent — may be beneficial owners of the U.S. subsidiary and must be reported.

Turkish state-owned enterprises (SOEs) or entities with significant Turkish government ownership may qualify for the governmental authority exemption if they exercise governmental authority on behalf of the Turkish government. However, this exemption is narrow and requires careful analysis.

Some Turkish investors use nominee shareholders or managers to hold U.S. entity interests. FinCEN's rules look through nominee arrangements — the actual beneficial owner (not the nominee) must be reported. Using nominees to avoid BOI reporting is a violation of the CTA.

Unlike New York's LLCTA, FinCEN BOI reports are not publicly accessible. Access is limited to:

• Federal agencies engaged in national security, intelligence, or law enforcement activities
• State, local, and tribal law enforcement agencies with court authorization
• Financial institutions (with the reporting company's consent) for customer due diligence
• Foreign law enforcement agencies through appropriate channels

This confidentiality may be relevant for Turkish investors with privacy concerns.

• $500 per day for each day a violation continues (up to $10,000 per violation)

• Up to 2 years imprisonment and/or fines up to $10,000 for willful violations

FinCEN has provided a safe harbor for entities that correct inaccurate reports within 90 days of the deadline for the initial report. This safe harbor may be available for entities that missed the January 1, 2025 deadline and file promptly.

Turkish companies must coordinate BOI compliance with other reporting obligations:

The FinCEN BOI reporting deadline for existing entities has passed. Turkish companies with U.S. subsidiaries that have not yet filed should do so immediately to limit penalty exposure and take advantage of available safe harbors.

ULF New York assists Turkish clients with BOI compliance analysis, report preparation, and coordination with other U.S. reporting obligations. Contact us for a compliance assessment.

This article reflects the CTA and FinCEN regulations as of January 2025. The regulatory landscape continues to evolve — including ongoing litigation challenging the CTA's constitutionality. Consult qualified legal counsel for current guidance.