The U.S. Department of Commerce has an agency called U.S. Bureau of Economic Analysis (BEA) that tracks the international commerce and publishes leading indicators of the economy like GDP. The economic statistics prepared by BEA help in gauging the performance of the U.S. economy and the role of the U.S. in the global economy. In relation to this, the agency collects the data of inbound and outbound U.S. investments. In order to collect the data, the BEA conducts 7 mandatory surveys on a quarterly, annually or five-yearly period.
Who Must Report?
For the mandatory reporting obligations, BEA collects data from;
- Any person or business of U.S. origin holding a 10% or greater interest in a foreign business.
- Any person or business of foreign origin holding a 10% or greater interest in a U.S. business.
- U.S. subsidiaries of foreign businesses.
- Foreign subsidiaries of U.S. businesses.
- U.S. or foreign-owned businesses that have transactions with the U.S. service sector.
Cross-border investment whether it is direct or indirect with ownership interests requires reporting under BEA obligations. Any failure to comply with any of the BEA norms attracts both civil and criminal penalties.
The BEA has made is mandatory for all foreign people who are making investments in the U.S. to give transactional reporting. The reporting has to be made within 45 days of acquisitions, expansions and business formation.
Reporting Obligations and Timeframe
- If the company makes a U.S. direct investment abroad then the compliance includes quarterly, annual and quinquennial i.e. 5 years reporting obligations.
- If the company makes a foreign direct investment in the US then the compliance includes quarterly, annual, quinquennial i.e. 5 years and transactional reporting obligations.
Reporting Obligations for Non-U.S. Person or Business Owing Business in the U.S.
The reporting obligation for a non US person or business owning a business in the U.S. can be divided into four parts; Transactional Survey, Quarterly Survey, Annual Survey and 5 Year Benchmark Survey.
- Transactional Survey
Transactional survey of the foreign direct investment in the U.S. is compulsory for every acquisition, formation and expansion of U.S. business. It must be filed within 45 days of the transaction. However, there is an exemption for filing if the transaction is below the threshold limit of $3 million.
- Quarterly Survey
Quarterly survey of the foreign direct investment in the U.S. is mandatory for every foreign person owning 10% or more of a U.S. business enterprise. The reporting must be done upon request from BEA, 30 days after each quarter or 45 days after year-end.
- Annual Survey
Annual survey of the foreign direct investment in the U.S. is mandatory for every foreign person owning 10% or more of a U.S. business enterprise. The reporting must be done upon request from BEA or 150 days after year-end.
- 5 Year Benchmark Survey
5 year benchmark survey of the foreign direct investment in the U.S. is required of all parties where a foreign person owns 10% or more of a U.S. business enterprise. The reporting has to be done within 150 days after year-end.
Reporting Obligations for a U.S. Person or Businesses having Ownership Interest in a Foreign Business
The reporting obligation for a US person or business owning a business in the U.S. can be divided into three parts; Quarterly Survey, Annual Survey and 5 Year Benchmark Survey.
- Quarterly Survey
Quarterly survey of the U.S. direct investment in abroad is for U.S. persons who owns 10% or more of a foreign business enterprise. The reports must be filed upon request from BEA or 30 days after each quarter or 45 days after year-end.
- Annual Survey
Quarterly survey of the U.S. direct investment in abroad is for U.S. persons who owns 10% or more of a foreign business enterprise. The reports must be filed upon request from BEA or 150 days after year-end.
- 5 Year Benchmark Survey
5 Year Benchmark Survey of the U.S. direct investment in abroad is for U.S. persons who owns 10% or more of a foreign business enterprise. It is the most comprehensive survey required by all the parties. The parties must file report within 150 days after the year-end.
Reporting Obligations for a U.S. Service Sector Business Transacting with Non-U.S. Parties
Reporting obligations for a U.S. service sector business are compulsory regardless of the fact that the ownership belongs to the U.S. or foreign ownership. The BEA services surveys track the foreign trade in services by U.S. companies. The BEA surveys apply to U.S. service sector companies regardless of the ownership.
The BEA surveys can be divided into three parts; quarterly survey, annual survey and benchmark survey.
- Quarterly Surveys
Quarterly surveys are for financial services, insurance services, U.S. ocean carriers, U.S. and foreign airline operators, selected services and intellectual property.
- Annual Surveys
Annual surveys are for foreign ocean carriers.
- Benchmark Surveys
Benchmark surveys are for financial services, intellectual property trade, insurance service and services like consulting, advertising, etc.
Bureau of Economic Analysis Compliance for Sample Organization Structures, Parent/ Subsidiary Relationships and Business Ownership Interests
- A U.S. business ownership abroad requires BEA reporting if it holds 10% or more ownership stake in such company. For example, U.S. Company holding 10% or more stake in a South African company requires BEA reporting.
A Foreign company having 10% or more stake in a U.S. business requires BEA reporting. For example, the South African company holding a 10% stake in a U.S. company is eligible for BEA reporting.
Reporting Obligations for Indirect Cross-Border Investment and Business Ownership
Any U.S. business that holds indirect business interest due to cross-border investment or business ownership requires BEA reporting.
About us
IMC Group is one of the leading firms that provide global compliance services. With our consulting services, we ensure that our clients from varied industry sectors comply with the complex BEA requirements in full and in a timely manner. Our experienced and expert team fulfils the burdensome mandatory reporting obligations of BEA in a smooth and simplified manner so that you can focus on running your business without any stress.
We guide you in implementing the best practices for collecting and retaining data, reporting processes and procedures as well as guide you on the response practices.
Our BEA Compliance Services
Few of our services include;
- BEA compliance assessment.
- Identifying when the business requires BEA reporting obligation.
- Effective and efficient maintenance of routine procedures, monitoring, collection of data, etc. to the BEA.
- Analysing complex BEA data requests and keeping a track of them.
- Gathering, retaining and reporting information in the prescribed manner.
- Completion and filing of BEA report.
To utilise our services you can reach us via email or phone.
