May 29 marks the first deadline for the 2014 Benchmark Survey of U.S. Direct Investment Abroad (BE-10 survey). The BE-10 survey is conducted by the U.S. Department of Commerce’s Bureau of Economic Analysis (“BEA”) under the authority of the International Investment and Trade in Services Survey Act. Through this survey and other surveys, BEA collects data for analytical purposes and to produce comprehensive statistics on U.S. direct investment abroad and foreign direct investment in the U.S. The statistics produced by BEA are available on its website according to country and industry and private and public sector entities use these statistics for various purposes.
The BE-10 survey is conducted every five years and the current survey is required of any U.S. person (any individual or entity that resides in the United States or is subject to the jurisdiction of the United States) that had a foreign affiliate—i.e., 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 point during the U.S. person’s 2014 fiscal year. The U.S. individual or entity that meets the filing requirement and is submitting the BE-10 survey is referred to as the “U.S. Reporter.” The U.S. Reporter must file a BE-10A form (for a corporation, this form must cover the fully consolidated U.S. domestic business enterprise). Additionally, each foreign affiliate must file one of the BE-10B, BE-10C or BE-10D forms depending on whether the foreign affiliate is majority or minority owned by the U.S. Reporter and the size of the assets, sales or net income of the foreign affiliate. The May 29, 2015 due date is for those U.S. Reporters filing fewer than 50 forms. U.S. Reporters filing 50 or more forms have until June 30, 2015 to complete the report.
The BE-10 survey requirements apply to private funds in the same way as traditional operating companies, holding companies and other entities. Likely in response to questions from industry, BEA recently made this clear by publishing “Frequently asked Questions” on its website that are focused on private funds. The FAQs provide some guidance on when private funds are required to complete the BE-10 survey, including with respect to limited partnerships and the BEA’s position that ownership of voting interest is considered to be divided equally among the general partners, with the limited partners owning no voting interest, unless the ownership agreement specifies otherwise.
While the due dates are soon approaching, BEA will consider reasonable requests for extension. As with other surveys, extension requests for the BE-10 report are to be received by BEA no later than the original due date of the report. For the BE-10 report, BEA has made available on its website a standard extension request form, apparently recognizing that many companies may need additional time to complete the report and also to streamline the process for BEA. The extension request form allows U.S. Reporters to request an additional month if expecting to file up to 100 forms and for U.S. Reporters expecting to file more than 100 forms, an additional two months.
Given the mandatory nature of the reports and the penalties that can be imposed for non-compliance, it is worthwhile to review the requirements for the BE-10 survey and determine whether a reporting obligation exists and if necessary, seek an extension soon.
While collecting the data required by BEA can be time-consuming, the statistics produced from the data are relied upon government officials and industry and often impact policy and business decisions in the United States and around the world.