Deadline is Looming for US Entities and Individuals to Report Their Investments Abroad (BE-10 Reports)
In 2014, the US Department of Commerce's Bureau of Economic Analysis (BEA) reinstated mandatory reporting of US investments abroad through a Form BE-10 benchmark survey (BE-10 Report). Accordingly, any US person that had a "foreign affiliate" (see definition below) at any point during its 2014 fiscal year is required to file a BE-10 Report. The first deadline for filing BE-10 Reports is May 29, 2015.
BEA collects information on US direct investment overseas, foreign direct investment in the United States, and international trade in services. BEA uses this information to compile a number of different economic and statistical reports that help gauge the performance of the US economy and the role of the United States in the global economy. Information submitted to BEA is confidential and is to be used for such economic and statistical reporting purposes only.
Who Is Required To File?
Any US person1 that had a "foreign affiliate" -- i.e., a direct or indirect ownership or control of at least 10 percent of the voting stock of an incorporated foreign business enterprise2 (or an equivalent interest in an unincorporated foreign business enterprise), including a branch -- at any time during the US person's 2014 fiscal year, is deemed a "US Reporter," and required to file a BE-10 Report. As a general matter, the general partner of a limited partnership will be deemed to have 100% of the voting interest in the limited partnership, unless the partnership agreement provides otherwise.3
Even if a US person had no foreign affiliates during its 2014 fiscal year, they may still need to file a "BE-10 Claim for Not Filing."
BE-10 Reporting Format
Each US Reporter is required to file a Form BE-10A to report data regarding the US Reporter itself and a Form BE-10B, BE-10C, or BE-10D, as applicable, for each of its foreign affiliates. If the US Reporter is an entity, Form BE-10A must cover the "fully consolidated US domestic business enterprise."4 To the extent a foreign affiliate is owned by more than one US Reporter, the US Reporter with the highest percentage ownership files a complete Form BE-10B, BE-10C, or BE-10D, and the other US Reporter makes only a partial filing. The BE-10 Forms and instructions can be found here.
BE-10 Reports are mandatory and are due by May 29, 2015 (for US Reporters who are required to file fewer than 50 Forms), or June 30, 2015 (for US Reporters who are required to file 50 or more Forms). US Reporters that require additional time to file BE-10 Reports should contact BEA to request an extension of time.
Failure to file a BE-10 Report with BEA can lead to civil penalties of between $2,500 and $25,000, and criminal penalties (for willful violations) of up to $10,000 and, if an individual, up to one year in prison.
The term "business enterprise" means "any organization, association, branch, or venture which exists for profit-making purposes or to otherwise secure economic advantage, and any ownership of any real estate."
The term "fully consolidated US domestic business enterprise" is defined as (1) the US business enterprise whose voting securities are not owned more than 50 percent by another US business enterprise, and (2) proceeding down each ownership chain from that US business enterprise, any US business enterprise whose voting securities are more than 50 percent owned by the US business enterprise above it. The consolidation excludes foreign branches and all other foreign affiliates.