Financial Crime World

Puerto Rico Entities Must Comply with New Beneficial Ownership Information Reporting Requirement

The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, has issued a final rule requiring certain entities in Puerto Rico to report beneficial ownership information as part of the Corporate Transparency Act. The new requirement aims to prevent money laundering and other financial crimes.

Who Must Comply

Under the rule, entities registered with the Puerto Rico Department of State must file a Beneficial Ownership Information (BOI) report with FinCEN by January 1, 2025. This includes:

  • Corporations
  • Limited liability companies
  • Other legal entities created or registered in Puerto Rico

What Is Required

The BOI report requires entities to provide basic information about themselves, as well as their beneficial owners and company applicants. The report must include:

  • Entity’s full legal name
  • Trade names
  • Addresses
  • Names of beneficial owners
  • Dates of birth of beneficial owners
  • Residential addresses of beneficial owners
  • Names of company applicants
  • Dates of birth of company applicants
  • Residential addresses of company applicants

Beneficial Owners and Company Applicants

  • Beneficial owners are defined as individuals who exercise substantial control over an entity or own at least 25% of its ownership interests.
  • Company applicants are those individuals who file the documents creating or registering a company, or those primarily responsible for directing or controlling the filing process.

Exemptions

The BOI report does not apply to all entities in Puerto Rico. Certain types of entities, such as:

  • Publicly traded companies
  • Non-profit organizations

are exempt from the reporting requirement.

Filing Requirements

  • FinCEN will begin accepting BOI reports on January 1, 2024.
  • Entities created or registered before that date have until January 1, 2025, to file their initial report.
  • Entities created or registered on or after January 1, 2024, must file within 30 days of registration.

Purpose and Enforcement

The new rule aims to increase transparency and help prevent money laundering and other financial crimes in Puerto Rico. FinCEN will use the information reported by entities to identify suspicious activity and take enforcement action against those who violate anti-money laundering laws.

Next Steps

Puerto Rico entities should review the final rule and determine an action plan to ensure compliance with the new reporting requirement. Tax advisors at RSM Puerto Rico can provide additional information and guidance on this matter, including assistance with completing the BOI report.