The BE-12 Benchmark Survey of Foreign Direct Investment in the United States is a mandatory survey conducted by the Bureau of Economic Analysis (BEA) to collect detailed information on foreign direct investment in the United States. It is conducted every five years and covers years ending in 2 and 7 and serves as a vital source of data for policymakers, researchers, and businesses. This article aims to provide an in-depth understanding of the BE-12 filing requirements and the process involved in submitting the report.
Overview
The BEA uses the BE-12 survey to collect comprehensive data on the operations of U.S. affiliates of foreign parents. The information gathered includes the affiliate’s financial, operational and employment data. This data is crucial for assessing the impact of foreign direct investment on the U.S. economy and formulating appropriate economic policies. Information submitted to BEA is confidential.
Who Must File a BE-12?
The BE-12 filing requirements apply to any U.S. business enterprise in which a foreign person or entity owns, directly or indirectly, 10% or more of the voting securities if the U.S. business is an incorporated entity or an equivalent interest if it is an unincorporated entity. A U.S. business is exempt from filing any BE-12 report if it meets all 3 criteria: (1) it is a private fund, (2) it doesn’t own, directly or indirectly, an operating company with at least a 10% voting interest owned by the foreign parent, and (3) there are no U.S. operating companies between the foreign parent and the private fund.
BE-12 Forms and Reporting Thresholds
There are four main forms for filing the BE-12, each with its reporting thresholds:
- BE-12A: This form must be completed by a majority-owned U.S. affiliate if, any of the following three criteria exceeded $300 million (positive or negative):
- (i) total assets,
- (ii) sales or gross operating revenues, or
- (iii) net income.
- Form BE-12B: This form must be completed by (i) a majority-owned U.S. affiliate, where any of the three items discussed above is greater than $60 million but not more than $300 million (positive or negative) and (ii) a minority-owned U.S. affiliate, where any of the three items is greater than $60 million (positive or negative)
- Form BE-12C: This form must be completed by a U.S. affiliate if none of the three items listed above exceeded $60 million (positive or negative)
- BE-12 Claim for Not Filing: This form must be completed by any U.S. person that is contacted by BEA but is not subject to the reporting requirements.
A U.S. affiliate is required to file on a fully consolidated domestic U.S. basis, including all U.S. business enterprises in the ownership chain, where the enterprise above holds more than 50% of the voting securities.
Foreign-owned U.S. real estate
Foreign-owned U.S. real estate is considered a U.S. affiliate and required to file BE-12. This includes single-unit rental properties partially used by owners, multi-unit residential or commercial properties, and equity REITs engaged in leasing real estate. However, U.S. residential real estate held for personal use by corporation owner(s) or serving as an owner’s primary residence leased during the owner’s absence is not considered foreign-owned for BE-12 purposes. To determine the appropriate BE-12 forms, aggregate all real estate investments of a foreign person, which are collectively considered one “U.S. affiliate.” The BEA offers a specific set of guidelines on its website for reporting foreign-owned U.S. real estate investments.
Filing Deadline
May 31, 2023 for paper filing and June 30, 2023 for e-Filing. An automatic extension is available via BEA’s eFile system at www.bea.gov/efile, if requested before the due date.
Filing Process
BEA provides an eFile system for submitting the BE-12 report at www.bea.gov/efile. The system allows filers to securely upload completed forms, schedules, and any necessary supporting documentation. First-time users need to create an account on the BEA eFile system before they can submit their reports.
Penalties for Noncompliance
Failure to file the BE-12 or providing false or misleading information can lead to civil and criminal penalties.
Conclusion
Filing the BE-12 report is crucial for U.S. affiliates with foreign investment. Understanding the filing requirements and process ensures compliance with federal regulations and helps the government assess the impact of foreign direct investment on the U.S. economy. If you are unsure about your filing requirements or need assistance with the process, it is advisable to consult with a legal expert.