The countdown is on: every five years, the U.S. Department of Commerce’s (DoC) Bureau of Economic Analysis (BEA) conducts a survey of U.S. corporate entities with foreign affiliates. The DoC conducts these surveys to produce statistics about U.S. direct investment abroad and ultimately to help formulate international financial and monetary policy. The deadline for this year’s survey is drawing near.
According to the U.S. Department of Commerce, all U.S. persons that owned, directly or indirectly, 10% or more of the voting stock of a foreign corporation, or an equivalent interest in an unincorporated foreign business enterprise (e.g., a partnership), at any time during the 2014 fiscal year, are required to file a BE-10 Report. These U.S. corporate entities are referred to in this process as “U.S. reporters”.
Individual forms are confidential, but the aggregated data is eventually made public for interested parties. According to analysts and government scholars, any information contained in the forms is confidential and is not used for the purpose of regulation, investigation or taxation and material contained within is exempt from legal proceedings.
That said, it is still compulsory for U.S. reporters to file the BE-10 according to the International Investment and Trade in Services Act. Failure to report may result in penalties of up to $25,000.00. The DoC offers a number of helpful resources on its site including video tutorials.
Companies filing more than 50 BE-forms of BE-10B, 10C and 10D are required to file by June 30. Companies filing less than 50 BE-forms of BE-10B, 10C and 10D were due May 29 however, the DoC will grant extensions on a case-by-case basis after reviewing the request of the U.S. reporter. Note that the filing deadline for all new filers has been extended to June 30, 2015.
What should filers have ready to prepare the response? Companies will want to enlist the help of a few different functional areas in order to complete the filing. The filing requires financial data, including assets, liabilities, total sales and net income. In addition the filing requires operational data such as fiscal year end, ownership structure, products and services, and primary industry.
As noted above, the deadlines are short. If you have questions about your responsibility as a U.S. reporter, or whether you are considered a U.S. reporter, please contact us or visit BEA’s website.
Don’t forget other surveys – BE-13 Foreign Investment in U.S.
As described in our prior client alert, the US Department of Commerce also requires Form BE-13 reporting by U.S. entities receiving certain direct or indirect foreign investment in U.S. businesses, including commercial real estate held through U.S. entities. In general, this reporting is required by the US entity receiving investments of over $3 million from direct or indirect foreign investors who receive at least a 10% “voting interest” in the US entity. The is a general rebuttable presumption that the general partner is treated as having all of the vote of a limited partnership, and that voting in an LLC is shared equally among its members. Information is confidential and may be used only for statistical purposes.
Specifically, a BE-13A report must be filed by a U.S. business enterprise when a foreign entity acquires a voting interest (directly, or indirectly through an existing U.S. affiliate) in that U.S. enterprise, segment, or operating unit and
- the total cost of the acquisition is greater than $3 million,
- the U.S. business enterprise will operate as a separate legal entity, and
- by this acquisition, at least 10 percent of the voting interest in the acquired entity is now held (directly or indirectly) by the foreign entity.
How and when do I file BE-13?
Electronic filing is available through BEA’s eFile system at www.bea.gov/efile. Copies of the report forms and instructions are available on BEA’s Web site at www.bea.gov/fdi. The due date for each report is no later than 45 days after the acquisition is completed, the new legal entity is established, or the expansion is begun.