U.S. persons owning 10% or more of non-U.S. business enterprises will be required to file the Benchmark Survey of U.S. Direct Investments Abroad (BE-10) in the coming weeks unless they qualify for an exemption. As the most comprehensive survey administered by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) every five years, BE-10 covers many U.S. asset managers and investment funds with direct investment abroad.1 As discussed in more detail below, the survey tracks financial and operating data of U.S. multinational enterprises and their Foreign Affiliates and is due by either May 30, 2025, or June 30, 2025, depending on the number of Foreign Affiliates to report. Non-submission of BE-10 carries the risk of both civil and criminal penalties.
When Is BE-10 Due?
If required to file BE-10, a reporter must submit the report by:
- May 30, 2025, if required to complete fewer than 50 Forms BE-10B, BE-10C, and/or BE-10D (i.e. there are fewer than 50 Foreign Affiliates to report)
- June 30, 2025, if required to complete 50 or more Forms BE-10B, BE-10C, and/or BE-10D (i.e. there are 50 or more Foreign Affiliates to report)
The report should reflect holdings as of December 31, 2024. Firms that are required to file the annual BE-11 survey will file BE-10 in lieu of BE-11 this year.
Who Needs to File BE-10?
A U.S. person is required to file BE-10 if the U.S. person had a Foreign Affiliate (i.e. a non-U.S. business enterprise in which the U.S. person has a "direct investment") at the end of the U.S. person's 2024 fiscal year (for purposes of this OnPoint, such U.S. persons are referred to as U.S. Reporters). "Direct investment" refers to direct or indirect ownership or control of at least 10% of the voting stock (or equivalent interest; collectively, "voting interests") of a non-U.S. business enterprise (collectively, Foreign Affiliates). In contrast to certain other BEA surveys, BE-10 must be filed by all U.S. Reporters, regardless of whether or not they have been contacted by BEA.
A U.S. Reporter must file on a fully consolidated domestic U.S. basis, which starts with the top-tier U.S. entity in an organization and includes all of its U.S. entities, proceeding down each ownership chain whose voting interests are more than 50% owned by the U.S. entity above it, but excluding foreign branches and all other Foreign Affiliates.
If required to report, a U.S. Reporter will complete one BE-10A, and for each Foreign Affiliate, one of three BE-10 forms: BE-10B, BE-10C or BE-10D. Determining which form applies to a particular Foreign Affiliate will depend on: (i) the total assets, sales or net income of the Foreign Affiliate during the fiscal year ending in 2024; and (ii) whether the foreign affiliate is majority-owned or minority-owned by the U.S. Reporter.2
What Information does BE-10 Capture?
BE-10 captures data concerning U.S. direct investment in non-U.S. companies, including (among other things): certain information about the organization and operations of a U.S. Reporter's business enterprise; information about transactions between the U.S. Reporter and its Foreign Affiliates; and financial and operational information about each Foreign Affiliate. BE-10 also includes questions on digital economy activities which capture (among other things) information as to the percentage of a U.S. Reporter's or Foreign Affiliate's services that are delivered remotely using information and communications technology networks.3 U.S. Reporters should also note that foreign real estate owned by a U.S. Reporter generally constitutes a Foreign Affiliate; the BEA recently published new guidance on reporting such real estate on BE-10.4
When Would a U.S. Asset Manager Have a Filing Obligation?
U.S. asset managers should consider whether they, or the funds they manage, have obligations to file BE-10 due to direct investments in non-U.S. business enterprises.
For U.S. asset managers, reporting obligations may arise principally under the following scenarios:
Scenario 1: A U.S. asset manager with foreign subsidiaries.
- For example, the foreign operating subsidiaries of a U.S. asset manager are reportable Foreign Affiliates of the U.S. asset manager if it owns at least 10% of the subsidiary's voting interests.
Scenario 2: A U.S.-based investment fund with direct investments abroad.
- For example, a U.S.-based investment fund that owns at least 10% of the voting interests of a non-U.S. entity could have a reportable Foreign Affiliate.
Scenario 3: A U.S. asset manager to a foreign private fund with direct investments in non-U.S. issuers.
- For example, based on BEA guidance, a U.S. asset manager that serves as general partner to a non-U.S. fund could be deemed to have a reporting obligation for a non-U.S. fund that owns at least 10% of the voting interests of a non-U.S. company (resulting in the non-U.S. company being a reportable Foreign Affiliate).
Note that U.S. Reporters are exempt from treating as Foreign Affiliates any non-U.S. "private funds"5 that do not own more than 10% of an "operating company" (directly or indirectly). The BEA defines an "operating company" as any business enterprise that is not a private fund or a holding company.6 For example, a U.S. reporter would not need to report its ownership of more than 10% of the voting interests of a foreign fund if that foreign fund only owns positions in other private funds or in operating companies of which it owns less than 10% of the voting interests.
What If a U.S. Person Owns Less than 10% of a Firm or Investment Fund?
Certain ownership data excluded from BE-10 may be reportable on forms administered under the TIC reporting system. In contrast to the BEA surveys' focus on direct investment, TIC forms collect information on "portfolio investments" (i.e., where a U.S. person owns less than 10% of a non-U.S. person's voting interests, or vice versa). Accordingly, to the extent there is U.S. ownership of less than 10% of the voting interests of a non-U.S. business enterprise, that information may be reportable on one or more TIC forms. Asset managers should consider how BE-10 and other BEA surveys relate to one another, as well as how the BEA surveys interact with those of other related reporting regimes, including the TIC reporting system. Taking a holistic approach to gathering and reporting data on these various forms can help to mitigate the reporting burden over time.
What if a Firm is Experiencing Difficulties Completing the Form by the Deadline?
The instructions to BE-10 provide a mechanism for submitting reasonable requests for extensions. In order to be considered, such a request must be submitted through the BEA's electronic filing system and must be received by the applicable filing deadline.
Dechert is available to assist with completing the forms and to answer questions regarding the BEA Surveys and TIC requirements.
What is BE-10 Data Used For?
The U.S. government uses the economic data collected in this survey in the preparation of the government's published macroeconomic surveys and to inform its economic and trade policies. This survey is not an instrument of market oversight, but instead is used for informational purposes, and the data collected is published on an aggregated, anonymous basis. The BEA uses BE-10 to produce statistics on the scale and effects of U.S.-owned business activities abroad.
What are the Penalties for Failure to File BE-10?
U.S. Reporters who do not file BE-10 may face civil penalties up to $59,114 and injunctive orders requiring compliance with the reporting obligations. Additionally, if it is found that a U.S. Reporter was willful in its noncompliance, the U.S. Reporter—or its officer, director, employee or agent involved in the willful noncompliance—may face criminal penalties of up to one-year imprisonment and a $10,000 fine.
Footnotes
1. BE-10 Benchmark Survey: U.S. Direct Investment Abroad.
2. BE-10B covers each majority-owned non-U.S. affiliate with total assets, sales or gross operating revenues, or net income (loss), greater than $80 million.
BE-10C covers:
a. each majority-owned non-U.S. affiliate with assets, sales or gross operating revenues, or net income (loss), greater than $25 million but for which no one of these items was greater than $80 million;
b. each minority-owned non-U.S. affiliate with assets, sales or gross operating revenues, or net income (loss), greater than $25 million; and
c. each non-U.S. affiliate: (a) for which none of the
assets, sales or gross operating revenues, or net income (loss),
was greater than $25 million; and (b) that is a non-U.S. affiliate
parent of another non-U.S. affiliate being filed on Form BE-10B or
BE-10C.
BE-10D covers non-U.S. affiliates: (a) for which none of the
assets, sales or gross operating revenues, or net income (loss),
was greater than $25 million; and (b) that is not a foreign
affiliate parent of another foreign affiliate being filed on Form
BE-10B or BE-10C.
3. For additional information, please refer to Guidance on Digital Economy Questions for the 2019 BE-10 Benchmark Survey of U.S. Direct Investment Abroad (April 2020).
4. For additional information, please refer to Reporting Real Estate Investments on the 2024 BE-10 Survey (March 2025).
5. "Private fund" refers to the same class of financial entities defined by the Securities and Exchange Commission as a private fund for purposes of Form PF: "any issuer that would be an investment company as defined in section 3 of the Investment Company Act of 1940 but for section 3(c)(1) or 3(c)(7) of ... [that] Act."
6. This exemption addresses certain historical redundancies in the data reported on BEA surveys and the data reported on surveys administered by the U.S. Department of the Treasury in connection with its Treasury International Capital (TIC) reporting system. For additional information, please refer to Private Funds Reporting Change (April 2016).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
