Beneficial Ownership Across the Border: United States Eases Reporting While Mexico Raises the AML Bar

By Brett W. Johnson, Alonso Sandoval, and T. Troy Galan

The United States and Mexico are moving in opposite directions on beneficial ownership and anti-money laundering (AML) compliance. In the United States, FinCEN’s August 2026 final rule largely exempts domestic entities and U.S. persons from federal beneficial ownership information (BOI) reporting. Mexico, by contrast, has significantly expanded the AML obligations applicable to persons conducting certain designated nonfinancial activities, known as “Vulnerable Activities,” through reforms adopted in 2025 and implemented through additional regulations and rules in 2026.

The changes are particularly relevant to businesses involved in real estate, nonfinancial lending, corporate and trust services, certain high-value goods and other Vulnerable Activities in Mexico, as well as U.S. companies that own, finance or transact with Mexican businesses.

The practical takeaway is straightforward: reduced BOI reporting obligations in the United States do not eliminate beneficial ownership, Know Your Customer (KYC), monitoring or other AML obligations in Mexico. Cross-border businesses should consider evaluating their obligations based on the entities and activities involved in each jurisdiction.

I. United States: The CTA Now Focuses on Foreign Companies

As discussed in our March 2025 Legal Alert, Corporate Transparency Act Update: A Reprieve for U.S. Companies, FinCEN substantially narrowed the Corporate Transparency Act (CTA) by exempting U.S.-created entities and U.S. persons from BOI reporting. FinCEN’s August 2026 final rule made that approach permanent.

For Mexican and other foreign businesses, however, the CTA remains relevant. An entity formed under Mexican law that registers to do business in a U.S. state or Tribal jurisdiction may still qualify as a reporting company unless an exemption applies. A foreign reporting company generally needs to report BOI for its non-U.S. beneficial owners, but not for U.S. person beneficial owners or company applicants.

The August 2026 final rule also provides additional relief for U.S. persons, including eliminating certain update and correction requirements for U.S. persons with FinCEN identifiers. FinCEN also announced that it will delete previously reported information regarding U.S. persons from its BOI database. The practical effect is a substantially narrower federal reporting regime, but one that continues to place certain Mexican and other foreign entities doing business in the United States within the CTA’s scope.

II. Mexico: A More Demanding AML Framework

The recent reforms materially changed what AML compliance looks like for businesses conducting Vulnerable Activities. What historically focused heavily on customer identification, recordkeeping and notices now includes a more formal risk-based compliance framework, with enhanced beneficial ownership requirements, customer risk classification, monitoring, training and audits.

Vulnerable Activities is the term used under Mexican law for specified nonfinancial activities viewed as presenting heightened money-laundering risk. Depending on the activity and applicable thresholds, these include certain real estate transactions, nonfinancial lending, corporate and trust services, high-value goods, vehicles, art, and other activities. The designation does not mean the business or transaction is suspicious; rather, it determines when the AML requirements apply.

The framework is rooted in the Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita (LFPIORPI), enacted in 2012 and supplemented by implementing Regulations and General Rules beginning in 2013. The 2025–2026 reforms build on that existing regime rather than replace it.

The timing is significant. The reforms followed deficiencies identified in Mexico’s prior Financial Action Task Force (FATF) evaluation and were adopted as Mexico prepared for its next FATF and Financial Task Force of Latin America (GAFILAT) evaluation. In practical terms, the reforms move Mexico closer to an AML model in which businesses are expected not simply to collect information and file notices, but to demonstrate how they identify, evaluate and manage money-laundering risk.

III. The Comprehensive 2025–2026 Reforms

The reforms were implemented through three principal measures:

1. Amendment to the LFPIORPI (July 16, 2025)

At the statutory level, the reform expanded both the scope of Mexico’s AML framework and the compliance obligations tied to Vulnerable Activities. Among other changes, it strengthened beneficial ownership requirements, introduced formal risk assessments, expanded record-retention requirements and added a 24-hour notice requirement where there are facts or indications suggesting that funds may have an illicit source or destination, including where a contemplated transaction is not completed.

It also introduced requirements for internal policies, annual training, automated monitoring and audits, moving the framework beyond customer identification, and periodic reporting toward a more formal compliance program.

2. Amendment to the Regulation (March 27, 2026)

The amended Regulation translated those broader statutory requirements into more concrete operating rules. They added detail regarding politically exposed persons (PEPs), beneficial ownership and the roles of the Unidad de Inteligencia Financiera (UIF) and Servicio de Administración Tributaria (SAT).

For companies, this meant that the 2025 reforms were no longer simply high-level statutory obligations; the procedures for identifying higher-risk customers, determining beneficial ownership, and interacting with regulators were becoming more defined.

3. Amendment to the General Rules (August 7, 2026)

The General Rules provide the detailed procedures for implementing the revised framework, including customer risk assessment, beneficial ownership, transaction monitoring, and internal controls. Several requirements are phased in over time.

Highlighted below are six changes applicable to all Vulnerable Activities:

IV. What Companies Should Consider Doing Now

Businesses with Mexican operations or transactions may want to promptly conduct a documented gap assessment and develop an implementation plan based on their activities and the applicable effective dates. Priority steps include:

V. Conclusion

The United States and Mexico are moving in different directions on beneficial ownership and AML compliance, creating a more complex compliance environment for companies operating across the border. It is incumbent on organizations operating cross-border to understand the nuances of the various compliance requirements. In addition, those organizations may need to consider the impact on affiliated entities (e.g., subsidiaries) and supply chain operations, including Maquiladoras and shelter operations.