The Bureau of Economic Analysis of the U.S. Department of Commerce (“BEA”) conducts the Benchmark Survey of Direct Investment Abroad every five years.
Form BE-10A must be completed and filed by U.S. persons, including individuals, who own, directly or indirectly, at least 10% of a foreign corporation or an unincorporated foreign business enterprise.
Until this year’s survey, only individuals who were contacted by the BEA were required to file, and those individuals had until May 29, 2015 to do so. However, for the first time this year, all individuals who meet the filing thresholds are required to file, regardless of whether they were contacted by the BEA. The filing deadline for these “new filers” is June 30. Failure to file the survey may result in civil penalties of between $2,500 and $25,000, and a willful failure can result in criminal prosecution.
There is a limited exception to the 10% threshold for certain residential real estate. Specifically, residential real estate held exclusively by an individual for personal use and not for profit making purposes is not subject to reporting. This exception includes residential real estate owned by a company, the sole purpose of which is to hold the real estate for the personal use of the owner of the company.
Only “U.S. Persons” who own 10% or more of a foreign enterprise must file Form BE-10A. A U.S. person is generally an individual who is a resident of, and subject to, the jurisdiction of the United States, with qualifications.
Individuals who reside, or who expect to reside, outside their country of citizenship for less than one year are considered to be residents of their country of citizenship. This means that a U.S. citizen who resides or expects to reside outside of the U.S. for more than one year would not be required to file Form BE-10A. This also means that an individual who plans to be in the U.S. for less than one year, for example on an employment visa, would not be subject to reporting.
Notwithstanding the exception, U.S. citizens who are residing outside of the U.S. because they are U.S. government employees, such as diplomats, consular officials, members of the armed forces, and their immediate families, are subject to the filing requirements.
There are also special rules for non-citizens who reside or expect to reside in the U.S. for more than a year. An example of such a person would be someone who has a renewed employment visa or a green card. If the individual owns or is employed by a business enterprise in their country of citizenship, but resides in the U.S. to conduct business for the enterprise, they are not required to file Form BE-10 if they intend to return to their home country within a “reasonable period of time”. An individual temporarily residing in the U.S. on an employment visa should be able to meet the “reasonable period of time” requirement of the exception. However, an individual residing in the U.S. with a green card or an investor visa would have to analyze their personal circumstances to determine if they meet the “reasonable period of time” requirement.
For individuals with a filing requirement who will not be able to meet the June 30 deadline, the BEA will consider extension requests. The individual requesting the extension should send a written request to the BEA and “enumerate the substantive reasons” for the extension request. The request for extension should be submitted prior to June 30.
For further questions on Form BE-10A or additional inquiries regarding international commercial law, please contact us to speak with Robert Ladislaw or William Blum.
Please be advised that this blog post is for informational purposes only, and does not constitute legal advice.