July 26, 2012
By Frances Johnston

The Bureau of Economic Analysis (BEA) under the US Department of Commerce has revised its requirements for filings by US companies that have foreign ownership of 10% or more. This is of particular importance to (i) overseas entrepreneurs who seek to establish a presence in the US and conduct business here through a US subsidiary that has a foreign parent, and (ii) other US entities that have sought and received funding from offshore investors and/or strategic partners. Companies are advised to check their equity ownership to determine whether or not the 10% threshold for foreign ownership has been reached. If so, there are now (at least) 3 separate reports that must be filed at different times with the BEA (with significant monetary penalties for failure to file).

Recurring reports include the Quarterly Survey on Form BE-605 (due within 30 days of the end of each fiscal quarter), the Annual Survey on Form BE-15 (due by the stated deadline for the fiscal year), and the Benchmark Survey on Form BE-12 (to be filed once every 5 years in lieu of the Annual Survey on Form BE-15 for the applicable year – with a filing deadline of May 31, 2013 for fiscal 2012). Although exemptions from quarterly and annual filings are available for companies whose financial results are below specified levels, those exemptions are not self-executing and companies must make appropriate filings to claim them initially. In addition, all companies whose foreign ownership is 10% or more must file a Benchmark Survey on From BE-12 by the applicable deadline, although companies whose financial results are below $20 million for the most recent reporting year may elect to file instead a Form BE-12C (which has reduced information requirements).

Further information and applicable forms are available on the BEA website at http://www.bea.gov/surveys/fdiusurv.htm. In addition, Royse Law Firm attorneys and paralegals are available to advise and assist clients with respect to any of the foregoing filings.