Foreign Direct Investment - New Reporting Requirements

Until September of 2014 only companies that were contacted by the U.S. Department of Commerce were required to file information regarding foreign direct investment (FDI) on the Form BE-13. Effective September 15, 2014 this form is required when the FDI falls under one of five different categories, with an exception for anyone that doesn't fit into one these five. The five categories are listed below:

1. Form BE-13A - A foreign person, directly or indirectly through a U.S. subsidiary, acquires at least a 10% voting interest in a U.S. business enterprise or a 10% voting interest in a segment or operating unit of a U.S. business enterprise, which is operated as a separate legal entity;

2. Form BE-13B - A foreign person, directly or indirectly through a U.S. subsidiary, creates a new U.S. legal entity and the foreign person, directly or indirectly through a U.S. subsidiary, owns at least a 10% voting interest in the new U.S. legal entity;

3. Form BE-13C - A foreign person, directly or indirectly through a U.S. subsidiary, acquires by merger a U.S. business enterprise or a business segment of a U.S. business enterprise;

4. Form BE-13D - A U.S. subsidiary of a foreign parent expands and begins to conduct business in a new facility;

5. Form BE-13E โ€“ A U.S. subsidiary of a foreign parent, having filed either a Form BE-13B or Form BE13-D, reports that the created or expanded U.S. business enterprise is still under construction;

The reporting is required pursuant to the International Investment and Trade in Services Survey Act, as amended. Required reporting includes the following:

1. Quarterly report: For reporting positions and transactions of a U.S. affiliate with its foreign parent(s) and foreign affiliates of its foreign parent(s) on the Quarterly Survey of Foreign Direct Investment in the United States (Form BE-605);

2. Annual report: For reporting financial and operating data of a U.S. affiliate on the Annual Survey of Foreign Direct Investment in the United States (Forms BE-15A, BE-15B, BE-15(EZ), and BE-15 Claim for Exemption); and

3. Benchmark report: For reporting financial and operating data of a U.S. affiliate, as well as positions and transactions of the U.S. affiliate with its foreign parent(s) and foreign affiliates of its foreign parent(s) on the Benchmark Survey of Foreign Direct Investment in the United States (Forms BE-12(LF), BE-12(SF), BE-12 Bank, BE-12 Mini, and BE-12 Claim for Not Filing).

There are significant penalties for non-compliance from $2,500 - $25,000 depending on the circumstances. More details of the reporting requirements can be found here and on the U.S. Department of Commerce's website.

Please contact us for further details or assistance with your reporting needs at 888-323-5994.

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