The US Treasury Department has permanently scrapped a cornerstone anti-money-laundering rule that required millions of companies to disclose their true owners, delivering an unheralded victory to a specific group: African tech entrepreneurs.
The final rule, issued by the Financial Crimes Enforcement Network (FinCEN), eliminates the obligation for US-registered companies and US persons to file beneficial ownership information (BOI) reports under the Corporate Transparency Act. The move, which took immediate effect upon publication, also orders the deletion of previously collected data on American citizens and residents.
For founders from Lagos to Nairobi who routinely incorporate in Delaware to attract venture capital, the change eliminates a compliance trap that many had not even realised they were in. Though the rule was designed to combat shell company abuse, its blunt architecture captured ordinary startups whose only connection to the US was a digital mailbox in Wilmington.
The launch of the BOI registry caused genuine panic among founders, particularly those incorporating startups in Delaware. Many were suddenly required to submit passport scans and home addresses to a US agency they had never heard of, with fines or even jail time for non-compliance. For founders unfamiliar with the US regulatory system, the reporting requirement created significant confusion and anxiety, and many simply missed the deadline.
The Corporate Transparency Act, passed in 2021, created a federal database of the individuals who ultimately own or control US companies. For the first time, the shell company-friendly US appeared to be aligning with global transparency standards. However, the reporting requirements were expansive: any domestic entity that registered with a state — including the tiny Delaware C-Corps favoured by foreign founders — had to disclose its beneficial owners unless it qualified for a specific exemption.
For African startups, the burden fell disproportionately. A founder in Accra who set up a Delaware parent company to hold intellectual property and issue equity to US investors suddenly had a federal filing obligation. The information demanded was personal, the penalties severe, and the awareness almost non-existent outside US legal circles.
The new rule, which adopts and makes permanent an interim exemption issued in March 2025, carves out all US-incorporated reporting companies entirely. Foreign entities that register to do business in the US must still report their foreign beneficial owners, but the reporting obligation for any US persons connected to those entities disappears. FinCEN has confirmed it will delete records “reasonably believed” to be linked to a US passport or driver’s licence.
For the typical African startup — a Delaware corporation with one or two founders, no physical US presence and a future funding round on the horizon — the rule amounts to a full exemption. The company files nothing. The founders’ data, if submitted, is slated for deletion.
For many African founders, the rollback is an enormous but quiet relief. Companies that filed BOI reports under pressure from US banks no longer have to worry about their sensitive personal information, including national identification numbers, being held in a US government database. The change removes a significant privacy concern, particularly for founders whose only connection to the US was incorporating a Delaware company.
Treasury Secretary Scott Bessent framed the move as “a victory for common sense and American small businesses,” adding that the administration was removing a burden without compromising national security. The White House has cast the broader rollback of the BOI requirement as part of a deregulatory push, arguing that the reporting mandate was overly broad and penalised legitimate enterprises.
Anti-corruption campaigners see the matter differently. Transparency International and the FACT Coalition have warned that gutting the BOI registry returns the US to its previous position as a destination of choice for anonymous shell companies, undermining efforts to trace illicit financial flows. They note that while the rule deletes US persons’ data, foreign-owned domestic companies — including those owned by politically exposed persons — will also benefit from the blackout, as the exemption applies to the reporting company, not the owner’s nationality.
Yet for the African startup ecosystem, the transparency loss is largely theoretical. The overwhelming majority of venture-backed African tech firms are funded by institutional investors who demand audited accounts, clean cap tables and extensive disclosures through investment agreements. These entities are rarely the vehicle of choice for hiding wealth; they were collateral damage in a law aimed at a different problem. The rollback therefore removes a regulatory headache for startups that were already subject to extensive scrutiny from their investors.
The quiet celebration also reflects a deeper structural reality. For years, Delaware has been the default jurisdiction for high-growth African startups because of its predictable corporate law and familiarity to global venture capitalists. The BOI requirement threatened to add a layer of friction that other jurisdictions — such as Mauritius, the Netherlands or the UK — might have exploited. By removing that friction, the US has, perhaps inadvertently, reinforced Delaware’s hold on African incorporations at a moment when rival hubs are competing for business.
Yet the relief is highly dependent on corporate structure, a point some lawyers say is being overlooked in the initial euphoria. The permanent exemption applies fully to companies that incorporated directly in the United States. Those entities and their owners, regardless of nationality, are out of the system entirely. A separate category, however, remains within FinCEN’s reach. African companies that registered their local entity directly in a US state — a route sometimes chosen to access an American bank account without forming a separate subsidiary — are classified as “foreign reporting companies.” The final rule does not exempt them. They must still report their non-US beneficial owners to the agency. What the rule does remove for these entities is the requirement to report any US-based agents or lawyers who helped them register, known as “company applicants.” That is a procedural simplification, but it leaves the core filing obligation intact.
The BOI rollback also marks a divergence between the US and Europe. The EU’s own beneficial ownership registers, driven by successive anti-money-laundering directives, remain in place despite a landmark 2022 court ruling that restricted public access. The UK’s Companies House is expanding its powers to verify identities, not retreating. For African founders who prize privacy, the contrast makes the US an even more attractive destination — not just for the law that remains, but for the law that just disappeared.