What you need to know:

The US government is presently conducting a comprehensive survey of US investment in foreign businesses.

What you need to do:

Any US person or entity that owns at least 10% of the voting interest in a foreign business must file a response to the survey by May 29, 2015 or June 30, 2015, depending on filer size and extent of foreign investment. In the case of a US operating company, a foreign business includes any subsidiary organized in a non-US jurisdiction. In the case of a private fund, a foreign business includes interests held in portfolio companies organized in a non-US jurisdiction and other funds organized in a non-US jurisdiction, as well as foreign subsidiaries of certain controlled portfolio companies.

The US Bureau of Economic Analysis prepares official US economic statistics, including analyses of US investments abroad and foreign investments in US businesses. Underlying data are collected through a variety of surveys, including the Benchmark Survey of US Direct Investment Abroad, which is currently ongoing. Survey responses must be filed by May 29, 2015 or June 30, 2015, depending on filer size and extent of foreign investment.

Who is subject to the Reporting Requirements?

All US individuals and entities (“US Reporters”) that own, directly and/or indirectly, 10% or more of a foreign business enterprise (a “Foreign Affiliate”) must respond to the Benchmark Survey. This includes private funds (see below). Eligible individuals or entities specifically contacted by the BEA may also have to respond to quarterly and annual surveys.

The Benchmark Survey

The Benchmark Survey is conducted once every five years and consists of (1) a primary response form (Form BE-10A) for the US Reporter and (2) ancillary forms for use depending on the size and number of a US Reporter’s Foreign Affiliates. The current survey, to which responses are due May 29, 2015 (for US Reporters required to file fewer than 50 ancillary forms) or June 30, 2015 (for US Reporters required to file 50 or more ancillary forms) covers the 2014 fiscal year. US Reporters responding to the Benchmark Survey will have to provide certain information on their products and services, revenues, employee headcount and compensation, and financial information.

Form BE-10A: A US Reporter must file a full Form BE-10A if any one of the following three items of the fully consolidated US business enterprise was greater than $300 million (positive or negative) at any time during the US Reporter’s 2014 fiscal year:

  • total assets,
  • sales or gross operating revenues excluding sales taxes, or
  • net income after provision for US income taxes.

If none of the above items exceeded $300 million, the US Reporter may complete a partial Form BE-10A, providing a subset of the requested information.

Ancillary Forms: The appropriate form for information regarding Foreign Affiliates is determined based on the size of the Foreign Affiliate, with the amount of information required to be included increasing with the size of the Foreign Affiliate. The determination is based on the Foreign Affiliate’s (1) total assets, (2) sales or gross operating revenues excluding sales taxes, and (3) net income after provision for foreign income taxes. Generally, the required forms break down as follows (though there are exceptions depending on whether the Foreign Affiliate is majority or minority owned or if the Foreign Affiliate is the parent entity of another Foreign Affiliate):

Click here to view table.

Individuals or entities that have been specifically contacted by the BEA for the purposes of responding to the Benchmark Survey, but that do not have any Foreign Affiliates may file a Form BE-10 Claim for Not Filing. Individuals or entities without any Foreign Affiliates and that have not been contacted by the BEA do not have to make any filing.

Private Funds

Private funds are subject to the BEA survey response requirements. According to the BEA, if a US private fund parent had at least 10% 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. Further, if a private fund is a limited partnership, the BEA considers the ownership of voting interests to be held by the general partner(s), with the limited partners owning no voting interest, unless otherwise specified in the ownership agreement.

The BEA has advised that, in the case of a US investment manager that manages or advises, but does not have majority voting interest in, several US funds, the individual funds should separately file the BE-10A if they meet the filing requirements for the BE-10 survey and the funds should not be consolidated with the manager.

Extensions

US Reporters who do not believe they will be able to respond to the Benchmark Survey by May 29, 2015, or June 30, 2015, as applicable, may file a BE-10 Request for Extension with the BEA on or before their applicable survey response deadline.

Confidentiality

Information collected by the BEA in connection with the Benchmark Survey is confidential and may only be used for analytical and statistical purposes. The BEA is forbidden from publishing the information in a manner specifically identifying the reporting company.

Penalties

According to BEA, failure to file a BE-10 report can subject the offender to civil penalties of between $2,500 and $25,000. The BEA may also be able to obtain injunctive relief. Willful failure to report can result in criminal penalties for the US Reporter and any officer, director, employee or agent who knowingly participates in the violation.