A BE-10 report is required of any U.S. person that had a foreign affiliate – that is, had direct or indirect ownership or control of at least 10 percent of the voting stock of an incorporated foreign business enterprise, or an equivalent interest in an unincorporated foreign business enterprise – at the end of the U.S. person’s 2019 fiscal year.
The U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) under the U.S. Department of Commerce is conducting its 2019 benchmark survey, the BE-10 Survey of Direct Investment Abroad. The BE-10 survey occurs every five years pertaining to U.S. persons (individuals and entities) with large and small investments in one or more foreign affiliates.
Who Must File Form BE-10
All U.S. persons with a foreign affiliate (regardless of the size of the foreign affiliate), must complete the Form BE-10 benchmark survey. For purposes of the benchmark survey, a U.S. person is any individual or entity that resides in the United States or is subject to the jurisdiction of the United States.
A foreign affiliate is any incorporated foreign business enterprise where a U.S. person directly or indirectly owns at least 10 percent of the voting stock or an equivalent interest in an unincorporated foreign business enterprise at any time during the 2019 fiscal year. A foreign business enterprise includes any organization, association, branch or venture which exists for profit-making purposes or to otherwise secure economic advantage and includes ownership of any real estate not held for personal use located outside the U.S.
Foreign affiliates that are private funds and display characteristics of portfolio investments do not report to the BEA, but rather through the Treasury International Capital reporting system of the U.S. Department of the Treasury. The operating companies owned by such private funds, however, remain subject to the BEA reporting requirements.
Form BE-10 Report
In order to have a complete benchmark survey, a U.S. person must complete Form BE-10A for that U.S. parent’s domestic operation. As noted below, additional Forms BE-10B, BE-10C and BE-10D may also be required. Determination of the full filing requirement depends on the ownership percentage the U.S. person has in the foreign affiliate and the value of assets, sales and net income of the foreign affiliate.
If the U.S. reporter is a corporation, the BE-10A report is required to be filed on a fully consolidated U.S. domestic business enterprise basis, excluding foreign branches and other foreign affiliates. If required, the BE-10B, BE-10C or BE-10D is filed for each foreign affiliate depending on whether the U.S. reporter has majority (>50 percent) or minority (between 10 and 50 percent) ownership of the foreign affiliate and the size of the affiliate.
Penalties for Failure to File
The Form BE-10 benchmark survey is mandatory to complete if the above filing requirements are met. Any U.S. person that is required to complete the survey and fails to do so can be subject to a civil penalty of $2,500 to $25,000. Criminal penalties are also possible if it is found that a U.S. person willfully fails to file the BE-10 survey and they could be subject to a criminal penalty up to $10,000 and up to one year in prison.
Filing Deadline and Extension Requests
A complete BE-10 report is due on the following dates:
- May 29, 2020 for a U.S. reporter required to file fewer than 50 forms;
- June 30, 2020 for a U.S. reporter required to file 50 or more forms.
An extension of time to file a BE-10 up to August 31, 2020 is available upon request before the original due date to the BEA, provided at their discretion.
For additional information on the BE-10 benchmark survey, please refer to the BE-10 Instruction booklet and other resources provided on the BEA Website for Form BE-10.