FinCEN Beneficial Ownership Enforcement Update 2026: What Turkish Companies Must Do Now

The Corporate Transparency Act's (CTA) beneficial ownership information (BOI) reporting regime has moved from implementation to active enforcement. The Financial Crimes Enforcement Network (FinCEN) is now processing reports, issuing guidance on complex ownership structures, and — critically — pursuing civil and criminal penalties against non-compliant entities. For Turkish-owned US businesses, the window for voluntary compliance without penalty exposure is narrowing.

The CTA's BOI reporting requirements took effect January 1, 2024, for existing entities and immediately for new entities formed after that date. After a period of litigation-driven uncertainty and extended deadlines, the reporting obligation is now firmly in place:

• Existing entities (formed before January 1, 2024): Were required to file by January 1, 2025
• New entities (formed January 1, 2024 or later): Must file within 30 days of formation
• Updated reports: Required within 30 days of any change in beneficial ownership information

Turkish companies that formed US entities before 2024 and have not yet filed are now delinquent and face penalty exposure.

A "reporting company" under the CTA is any corporation, LLC, or similar entity created by filing with a state secretary of state — unless an exemption applies. The 23 exemptions include:

• Large operating companies (more than 20 full-time US employees, more than $5 million in US gross receipts, and a physical US office)
• SEC-reporting companies
• Banks, credit unions, and certain regulated financial entities
• Tax-exempt entities

Critical for Turkish companies: Most Turkish-owned US subsidiaries, holding companies, and investment vehicles do not qualify for exemptions. A Turkish parent company owning a Delaware LLC or New York corporation almost certainly has a reporting obligation.

Each reporting company must disclose:

Company information:

• Legal name and any trade names (DBAs)
• Principal US address
• State of formation
• EIN or other tax identification number

Beneficial owner information (for each individual who owns 25% or more, or exercises substantial control):

• Full legal name
• Date of birth
• Residential address
• Unique identifying number from a passport, driver's license, or other government-issued ID
• Image of the identifying document

For Turkish beneficial owners: A Turkish passport is an acceptable identifying document. FinCEN's system accepts foreign passports for non-US beneficial owners.

The substantial control prong captures individuals who do not own 25% but exercise significant influence over the company. This includes:

• Senior officers (CEO, CFO, COO, General Counsel, and equivalents)
• Individuals with authority to appoint or remove senior officers or a majority of the board
• Individuals with authority over major decisions (disposition of assets, incurring significant debt, amendments to governing documents)

For Turkish companies with US subsidiaries, Turkish executives who make decisions for the US entity — even if they hold no equity in the US entity — may be beneficial owners under the substantial control prong.

The CTA's penalty structure is significant:

• Civil penalties: Up to $591 per day (inflation-adjusted) for each day of willful non-compliance
• Criminal penalties: Up to $10,000 fine and up to two years imprisonment for willful violations
• Safe harbor: FinCEN has provided a safe harbor for entities that correct inaccurate reports within 90 days of the original filing deadline

The "willful" standard is key — FinCEN has indicated that entities that were aware of the requirement and failed to comply will be treated as willful violators. Given the extensive publicity around CTA requirements, ignorance is increasingly difficult to claim.

Many Turkish companies hold US assets through multi-tier structures: a Turkish holding company owns a Cyprus or Netherlands intermediate entity, which owns the US operating company. The CTA requires tracing through the ownership chain to identify the ultimate individual beneficial owners. Intermediate entities that are themselves reporting companies must also file.

Some Turkish investors use nominee shareholders or directors for privacy reasons. The CTA requires disclosure of the actual beneficial owners, not nominees. Nominee arrangements do not shield beneficial owners from disclosure obligations.

Turkish investors who hold US assets through trusts must analyze whether the trust is a reporting company and who qualifies as a beneficial owner. Trustees, beneficiaries with certain rights, and grantors may all be beneficial owners depending on the trust structure.

Any change in beneficial ownership — including a Turkish parent company restructuring, a change in the identity of controlling executives, or an address change — requires an updated BOI report within 30 days.

Entities that have not yet filed or have filed inaccurate reports should:

1. File immediately: Late filing reduces but does not eliminate penalty exposure
2. Document the correction: Maintain records of when the error was discovered and corrected
3. Consult counsel: Particularly for complex ownership structures or if FinCEN has already made contact

New York's LLC Transparency Act imposes parallel beneficial ownership disclosure requirements for LLCs formed or registered in New York. Turkish investors with New York LLCs must comply with both federal CTA requirements and New York state requirements, which have some differences in scope and procedure.

Our compliance attorneys assist Turkish-owned US entities with CTA beneficial ownership analysis, report preparation, and ongoing compliance monitoring. We also advise on the interaction between federal CTA requirements and state-level transparency laws, and represent clients in FinCEN inquiries.

This article is for informational purposes only and does not constitute legal advice. CTA compliance is fact-specific; please consult qualified counsel for advice tailored to your entity's ownership structure.