Change to BEA reporting: Affects certain cross‐border investments by or into private funds

In addition to the numerous tax and regulatory reporting obligations that private investment funds must adhere to, many private investment funds are also subject to a lesser known reporting regime that is enforced by the Bureau of Economic Analysis (“BEA”), which is a division of the United States Department of Commerce. The BEA utilizes these reports to collect and analyze inbound and outbound investment.

As you may recall, the reporting requirements pursuant to the BEA became more widely known in 2015 when the filing of the Form BE-10 became mandatory for entities that had not been contacted directly by the BEA. This automatic filing requirement extended to many entities within the private investment fund community causing an outcry and requests for reform.

The BEA announced that the reporting regime will be consolidated under the United States Treasury Department. The reporting change will apply to investments by U.S. entities who hold a 10 percent or more voting interest in a foreign private fund, and to investments by foreign entities that hold a 10 percent or more voting interest in a U.S. domiciled private fund. The BEA has prepared a helpful decision tree, located here, to assist with identifying a private investment fund’s reporting obligation. Below is a non-exclusive brief overview of the current BEA filing requirements that may affect the private investment fund community.

Form number Form name Purpose Who files
Form BE-577 Quarterly Survey of U.S. Direct Investment Abroad To report positions and transactions between
a U.S. reporter and its foreign affiliates.
Only entities that are contacted by BEA are required to report.
Form BE-11 Annual Survey of U.S. Direct Investment Abroad To report annual financial and operating data of the U.S. reporter and its foreign affiliates. Only entities that are contacted by BEA are required to report.
Form BE-10 Benchmark Survey of U.S. Direct Investment Abroad To obtain a comprehensive survey of U.S. direct investment abroad. A response is required from entities subject to the reporting requirements of the BE-10, whether or not they are contacted by BEA.
Form BE-13 Survey of New Foreign Direct Investment in the United States To measure the amount of new foreign direct investment in the U.S. and to identify potential new reporters. A response is required from entities subject to the reporting requirements of the BE-13, whether or not they are contacted by BEA.
Form BE-605 Quarterly Survey of Foreign Direct Investment in the United States To report the positions and the transactions between a U.S. affiliate and its foreign parents and between the U.S. affiliate and the foreign affiliates of the
foreign parents.
Only entities that are contacted by BEA are required to report.
Form BE-15 Annual Survey of Foreign Direct Investment in the United States To report annual financial and operating data of U.S. affiliates. Only entities that are contacted by BEA are required to report.
Form BE-12 Benchmark Survey of Foreign Direct Investment in the United States To obtain a comprehensive survey of foreign direct investment
in the United States.
A response is required from entities subject to the reporting requirements of the BE-12, whether or not they are contacted by BEA.
Form BE-180 Benchmark Survey of Financial Services transactions Between U.S. Financial Services Providers and Foreign Persons To obtain information on financial services transactions between U.S. financial services providers and foreign persons. A response is required from persons subject to the reporting requirements of the BE-180 survey, whether or not they are contacted by BEA.

Conclusion

For more information regarding these changes and how you or your fund or management company may be affected, please contact your Arthur Bell advisor at 855-787-0001 or via email at contactus@arthurbellcpas.com.

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