Fund managers of master feeder funds, money managers investing in foreign companies, or firms with foreign affiliates, should take note of Form BE-10, a new filing obligation with an approaching deadline.
The Bureau of Economic Analysis of the U.S. Department of Commerce (“BEA”) announced that the filing deadline for all new filers has been extended to June 30, 2015. A new filer refers to a U.S. company or person that is required to file on the BE-10 survey but has never filed any BEA survey of U.S. direct investment abroad, including the BE-10, BE-11 and BE-577 surveys. Previously, the deadline for filers required to file fewer than 50 forms was May 29, 2015, and June 30, 2015 for those filers required to file 50 or more forms.
The BEA conducts the BE-10 benchmark survey of U.S. direct investment abroad every five years to gather current economic data on the operations of U.S. parent companies and their foreign affiliates, including private funds. The information reported on the Form BE-10 includes the products and services provided by, the number of employees of, and the revenue and other financial data of, a U.S. reporter and its non-U.S. affiliates.
A BE-10 report is required of any U.S. person that had a foreign affiliate - that is, that had direct or indirect ownership or control of at least 10 percent of the voting stock of an incorporated foreign business enterprise, or an equivalent interest in an unincorporated foreign business enterprise, including a branch – at any time during the U.S. person’s 2014 fiscal year. A U.S. person refers to any individual, branch, partnership, associated group, association, estate, trust, corporation or other organization (whether or not organized under the laws of any state) and any government (including a foreign government, the U.S. Government, a state or local government, and any agency, corporation, financial institution, or other entity or instrumentality thereof, including a government-sponsored agency).
If a U.S. private fund parent had at least 10 percent voting interest in a foreign business enterprise, including a fund, it must report regardless of whether it had any equity (financial) interest in the foreign fund. An investment manager may be a U.S. parent if it meets these criteria. If a private fund is a limited partnership, BEA considers ownership of voting interest in limited partnerships to be divided equally among the general partners, with the limited partners owning no voting interest, unless otherwise specified in the ownership or partnership agreement.
There remains some ambiguity regarding U.S. persons with no foreign affiliates. Although the instructions on the BEA’s website indicate that all U.S. persons with no foreign affiliates must make a BE-10 Claim for Not Filing, the BEA’s training video makes plain that if the U.S. person had no foreign affiliates during its 2014 fiscal year and if it was notified by the BEA that a filing is required, then the U.S. person must file a “BE-10 Claim for Not Filing”, and that otherwise no filings are required.