Alert to Foreign Owners of U.S. Businesses

January 12, 2015 deadline for filing BEA survey

January 5, 2015
Legal Update

The United States tracks foreign investment in the USA.  It does this through the Bureau of Economic Analysis (BEA).  BEA has reinstated a requirement for foreign owners of U.S. businesses to file a form and report annually. (Click here for a link to BEA rules and forms.)  For several years, reports were not required.  The requirement is back, and the deadline is January 12, 2015.  Penalties for not filing include fines of up to $32,500 and even jail time in willful cases.

What needs to be reported?  All the following, including investment in new facilities of long-existing U.S. subsidiaries:

1.  If a foreign owner acquires a U.S. business enterprise that remains a separate legal entity and

2.  If a foreign owner establishes a new U.S. business entity and 

3.  If a foreign owner acquires and merges a U.S. entity into an existing U.S. affiliate and

4.  If the existing U.S. affiliate of a U.S. business entity expands operations

If a foreign owner or affiliate is not required to report any of the above items solely because the amount is under the $3 million threshold, but one of the conditions listed above is met, an exemption form must still be filed. 

There will be questions whether a Form BE-13 should be filed.  For example, if an existing facility of a foreign owned U.S. business expands, is a filing required?  Answer – no, because it is not a “new” facility.  The facility must be “separate” for a filing to be required (either Form 13D if the cost exceeds $3 million or the Exemption Form if less).

BEA information is gathered for U.S. analytical and statistical purposes only.  Information provided on BEA forms is treated as confidential and may not be shared with other U.S. Government agencies, such as the IRS or Department of Justice.

For further information or assistance regarding BEA reporting, contact Joe Dehner  (jdehner@fbtlaw.com) in Frost Brown Todd’s International Services Group.

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