The U.S. Commerce Department’s Bureau of Economic Analysis (“BEA”) administers a five-year benchmark survey to collect information on foreign direct investment in the United States. The BE-12 survey, as it is commonly known, is mandatory for any U.S. business where ten per cent or more of the U.S. business’ voting interests are owned, directly or indirectly, by a foreign person.
Key note to be aware of is that unlike past BEA survey years, the BEA has announced that all qualifying businesses must complete the survey this year, regardless if they were contacted by the BEA directly.
The deadline for paper filing has since passed (May 31, 2018). But, you have until June 30, 2018 to file electronically by means of BEA’s eFile online system.
A BE-12 survey has to be filed when a U.S. business meets the ten per cent threshold as discussed above. The reporting period for the BE-12 is the company’s 2017 fiscal year and the information required in the BE-12 survey typically includes: identification of foreign parents, major products and/or services provided by the U.S. business, sales or gross operating revenues, balance sheet information, income and employment information, and financial and operating data for the U.S. business.
There are four survey options available: BE-12A, BE-12B, BE-12C, and the BE-12 Claim for Not Filing. Which form a business is required to complete will depend on the size of the U.S. business and its percentage of foreign ownership. See below for further details on the various forms:
The breadth of the BE-12 survey is far reaching and will likely apply to many businesses that engage in cross-border investment. The BEA may subject civil and/or criminal penalties on the business and its directors, officers, and employees for failure to participate in the mandatory survey. Therefore, U.S. and foreign asset managers and companies should carefully review the reporting requirements, even if they do not usually file BEA survey responses.
If you have questions regarding the BE-12 survey and reporting obligations, please don’t hesitate to contact a Wolrige Mahon advisor.
Source: Wolrige Mahon LLP