Every five years, the Bureau of Economic Analysis (BEA), an agency in the United States Department of Commerce, conducts a comprehensive survey of U.S. direct investment in foreign business enterprises. The BEA uses the Benchmark Survey of U.S. Direct Investment Abroad (BE-10 Report) to compile this information. This year, the BEA is conducting the survey to compile information about U.S. direct investment abroad for the fiscal year ending in 2014. In prior surveys, a U.S. person had to complete the BE-10 Report if the person met certain reporting requirements and only if the BEA contacted the person asking them to complete the Report. However, due to recent regulatory changes, all U.S. persons meeting the reporting requirements must complete the BE-10 Report, whether or not the BEA contacts them.

The deadline for filing the BE-10 Report is as early as May 29. It may be extended by request filed before that date. (An extension request is available on the BEA's website here.)

All U.S. persons1 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. For purposes of the BE-10 Report, a U.S. person subject to the reporting requirements is called a "U.S. Reporter" and the foreign corporation or business enterprise is called a "foreign affiliate."

The BE-10 Report is comprised of several forms.

  • Form BE-10A (Report for U.S. Reporter):

This form is used to report information concerning the U.S. person that has a foreign affiliate. If the U.S. Reporter is a corporation, the report is filed on a fully consolidated U.S. domestic business enterprise basis; it does not include foreign branches and foreign affiliates.

The U.S. Reporter must complete the entire Form BE-10A if any one of the following items of the U.S. Reporter was greater than $300 million (positive or negative) at any time during the 2014 fiscal year: (1) total assets; (2) sales or gross operating revenues, excluding sales taxes, or (3) net income after U.S. income taxes. If none of these items were greater than $300 million (positive or negative), then the U.S. Reporter completes only items 1 through 42 and items 97 through 114.

If the U.S. Reporter is an individual, trust, estate or non-profit entity and owns the foreign interests directly or indirectly through a foreign business entity (and not through a U.S. business enterprise), only items 1, 2 and 5 of Form BE-10A must be completed (attach explanation). The U.S. Reporter, however, will still need to complete the applicable following forms on the foreign affiliates:

  • Form BE-10B (Report for Foreign Affiliate of U.S. Reporter)

A U.S. Reporter must file this form for each foreign affiliate that is a majority-owned2 foreign affiliate with assets, sales, or net income greater than $80 million (positive or negative) during the 2014 fiscal year.

  • Form BE-10C (Report for Foreign Affiliate of U.S. Reporter)

A U.S. Reporter must file this form for each foreign affiliate that falls within one of the following categories during the 2014 fiscal year:

- Majority-owned foreign affiliates for which total assets, sales or net income is greater than  $25 million (positive or negative), and none of these items was greater than $80 million (positive or negative);

- Minority-owned3 foreign affiliates for which total assets, sales or net income is greater than $25 million; or

- Foreign affiliates for which total assets, sales or net income did not exceed $25 million (positive or negative) and that were parents of other foreign affiliates being filed on Form      BE-10B or BE-10C.

  • Form BE-10D (Report for Foreign Affiliate(s))

A U.S. Reporter must file this form for each foreign affiliate for which assets, sales, and net income did not exceed $25 million (positive or negative) during the 2014 fiscal year and the affiliate was not a foreign parent of another foreign affiliate reported on Form BE-10B or Form BE-10C.

The deadline for filing the BE-10 Report depends on the number of BE-10B, BE-10C and BE-10D forms the U.S. Reporter has to file. If the U.S. Reporter must file fewer than 50 forms, the deadline is May 29, 2015. The deadline to file the BE-10 Report is June 30, 2015 if the U.S. Reporter must file 50 or more forms. If a U.S. Reporter cannot meet these deadlines, the U.S. Reporter can request an extension by filing a request to the BEA no later than the Report's original due date. The May 29 deadline may be extended to June 30.

A U.S. Reporter that fails to file a BE-10 Report can incur a civil penalty between $2,500 and $25,000. There are also criminal sanctions for willfully failing to file the BE-10 Report. Any officer, director, or employee of a corporation who knowingly participates in the failure to file the BE-10 Report can also face civil and criminal penalties.

Footnotes

1. The term "U.S. person" includes any individual, branch, partnership, association, estate, trust, corporation or other organization that resides in or is subject to the jurisdiction of the United States.

2. A foreign affiliate is "majority-owned" if the U.S. Reporter's combined direct and/or indirect voting ownership interest (or equivalent) exceeds 50%.

3. A foreign affiliate is minority-owned if the U.S. Reporter's combined direct and/or indirect voting ownership interest (or equivalent) is at least 10% but not more than 50%.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.