The Corporate Transparency Act and Cook Islands Trust Structures

Most people with a Cook Islands trust structure have no filing obligation under the Corporate Transparency Act. Since FinCEN narrowed its rules in 2025, the only companies that must file beneficial ownership information (BOI) reports are companies formed under foreign law that have registered to do business in a U.S. state. U.S. companies and U.S. persons are exempt entirely.

The offshore LLCs used inside Cook Islands trust structures rarely meet that definition. A Cook Islands or Nevis LLC that holds foreign bank and brokerage accounts does not register to do business in any U.S. state, so it never becomes a reporting company. The trust itself is not a reporting company either.

Is BOI Reporting Still Required?

BOI reporting is still required, but only for foreign-formed companies that have registered to do business in a U.S. state or Tribal jurisdiction. Every entity created in the United States, and every U.S. person who owns one, is exempt from reporting.

The rule arrived at this narrow scope in stages. Congress passed the Corporate Transparency Act in 2021, and reporting began on January 1, 2024, for more than 32 million U.S. corporations and LLCs. Federal courts blocked and unblocked the rule several times during 2024. In March 2025, the Treasury Department announced it would not enforce penalties against U.S. citizens or domestic companies, and FinCEN then redefined “reporting company” to cover foreign-formed, U.S.-registered companies only.

A foreign company that does meet the definition files its report with FinCEN, a bureau within the Treasury Department. Companies registered in a U.S. state before March 26, 2025, had until April 25, 2025, to file. A foreign company that registers after that date must file within 30 days of its registration becoming effective. Even then, the company reports only its non-U.S. beneficial owners, because U.S. persons are exempt from the reporting rules.

Companies that remain covered face the original penalties. Civil penalties run above $500 per day, adjusted for inflation. Willful violations can also bring criminal fines up to $10,000 and up to two years in prison.

Does a Cook Islands or Nevis LLC Have to File a BOI Report?

A Cook Islands LLC or Nevis LLC does not file a BOI report unless it has registered to do business in a U.S. state, and the offshore LLCs used in trust structures are not built to do that. Forming a company in the Cook Islands or Nevis does not, by itself, create any FinCEN filing obligation.

Registration is the entire trigger. A foreign LLC registers by filing paperwork with a state’s secretary of state, and a company typically does that because it operates a business or owns real estate in that state. An offshore LLC inside a trust structure exists to hold the trust’s financial assets at foreign banks and brokerage firms. It has no U.S. business operations and no U.S. real estate titled in its name, so it has nothing to register.

The offshore LLCs we see inside Cook Islands trust structures hold foreign bank and brokerage accounts. They do not operate U.S. businesses or take title to U.S. real estate, so registering to do business in a U.S. state never comes up.

The jurisdiction of the LLC does not change the answer. A Cook Islands LLC is the usual choice when a Cook Islands trust owns the company, because trustee and company sit under the same legal system. A standalone offshore LLC without a trust is usually formed in Nevis, where a Nevis LLC gives creditors only a charging order—a court lien on the member’s distributions—that expires after three years and cannot be renewed. Neither company files anything with FinCEN unless it registers in a U.S. state.

The rule contains a second layer of protection for the unusual offshore LLC that does register. A reporting company does not report the beneficial ownership information of any U.S. person, and a foreign reporting company whose beneficial owners are all U.S. persons is exempt from reporting any beneficial owners at all. A Nevis LLC owned by a U.S. settlor’s trust would file, at most, a report naming no one.

Is a Cook Islands Trust a Reporting Company?

A Cook Islands trust is not a reporting company under the Corporate Transparency Act and never has been. A Cook Islands trust is an agreement between a settlor and a licensed Cook Islands trustee. Creating one involves no filing with any U.S. secretary of state, and a trust does not register to do business anywhere.

Even the original 2024 version of the rule reached only entities created by a state filing, which excluded nearly all trusts. The current rule removes any doubt: a trust is not formed under foreign corporate law and registered in a U.S. state, so it sits outside the definition twice over.

Domestic companies inside the structure are also exempt now. Some Cook Islands trust structures include a Florida, Wyoming, or other U.S. LLC that holds domestic assets, with the trust as its member. Those LLCs were reporting companies in 2024 and many filed BOI reports. Under the current rule, they are U.S. entities and file nothing.

What Happens to BOI Reports Already Filed?

FinCEN still holds the beneficial ownership data that millions of U.S. companies filed in 2024 and early 2025. What happens to that stored data is a policy question working its way through rulemaking and Congress, and nothing about it requires an exempt company to act.

Since the 2025 rule change, the Corporate Transparency Act question we hear most often comes from settlors who filed BOI reports for domestic LLCs in 2024 and want to know what happens next. Nothing further is due: an exempt company has no duty to update or correct an earlier report, and the filed data simply sits with FinCEN.

How the BOI Rules Could Change Again

The Corporate Transparency Act is still on the books, and the exemption for U.S. companies lives in FinCEN’s regulations rather than in the statute. A future administration could broaden the reporting rules again through the same rulemaking process that narrowed them, and both Congress and the courts continue to shape the law’s reach.

One trigger has stayed constant through every version of the rule: a U.S. state formation or registration filing is what brings an entity within FinCEN’s reach. An offshore LLC that never registers has had nothing to file under any version so far.

None of those outcomes changes how the trust protects assets. A Cook Islands trust works because Cook Islands courts do not recognize U.S. judgments, and that protection operates the same whether or not FinCEN collects ownership data. Licensed Cook Islands trustees already run full identity and source-of-funds diligence on every settlor before accepting a trust, so the structure has never depended on the owner being unknown.

The trust’s annual reporting to the IRS and FinCEN also continues no matter what happens to the BOI rule. A settlor deciding whether to establish a Cook Islands trust does not need to wait on Washington: whichever way the rulemaking and the litigation come out, the trust’s protection and its tax reporting stay the same.

BOI Reporting Is Separate from the Trust’s Tax Filings

The Corporate Transparency Act rollback changed nothing about the tax reporting that comes with a Cook Islands trust. The grantor still reports transfers to the trust and its annual activity on Forms 3520 and 3520-A, and still files an FBAR whenever the trust’s foreign accounts exceed $10,000 in aggregate value during the year. Foreign banks and trustees also report U.S.-owned accounts to the IRS under FATCA and to other countries’ tax authorities under the CRS.

The confusion we see most often is between FinCEN’s two filings. A settlor reads that FinCEN no longer requires beneficial ownership reports and concludes the FBAR went away with it. The FBAR is a separate FinCEN filing under a different law, and it applies every year the trust’s foreign accounts exceed the $10,000 threshold.

These filings are the CPA’s work, not the attorney’s. The attorney designs and documents the trust structure; the CPA who prepares the grantor’s returns determines which forms apply each year and files them. A settlor whose CPA has not handled foreign trust reporting before should raise the topic before the first filing season, not after.