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What Happened

As we reported in yesterday’s client alert, the US Bureau of Economic Analysis (BEA) has announced that it is conducting a survey of all US businesses whose voting interests are 10% or more owned, directly or indirectly, by a foreign person.  Responses to this survey are mandatory for every such US business enterprise, as described more fully below.  These responses are due May 31, 2023 (or June 30, 2023 if submitted via the BEA’s electronic filing portal).

The Bottom Line

BEA is an independent statistical agency within the US Department of Commerce.  The BEA is perhaps best known for calculating influential economic indicators such as the gross domestic product and the trade deficit.  However, it also produces various reports relating to foreign investment in the United States.

As part of its responsibilities relating to foreign investment, the BEA collects data annually from US business enterprises 1 with foreign voting interests of at least 10%.  These annual filings – reported on various types of Form BE-15 – are required to be prepared by US business enterprises if they are specifically contacted by the BEA for this purpose.  However, once every five years, the BEA conducts a more comprehensive survey of all US business enterprises with foreign investment exceeding the specified reporting thresholds.  This once-every-five-year survey on various types of Form BE-12 is required to be submitted by all US business enterprises meeting the reporting thresholds regardless of whether or not they are contacted by the BEA directly

Subject to some limited exceptions discussed below, if a foreign person owned 10% or more of the voting interests of a US business enterprise as of the end of its 2022 fiscal year, that US business enterprise is considered a US affiliate and is required to file Form BE-12 with respect to its 2022 fiscal year no later than May 31, 2023 (or June 30, 2023 if filing electronically using the BEA electronic filing portal).  There is no exception from the BEA’s filing requirements for US public companies despite the substantial information publicly available on them.

The Full Story

What is the purpose of this survey from the Bureau of Economic Analysis?

As noted above, the BEA is an independent, economic information gathering and analysis bureau within the Department of Commerce.  The Form BE-12 is authorized pursuant to the International Investment and Trade in Services Survey Act (P.L. 94-472., 22 U.S.C. §§ 3101-3108) (the Act).  The information gathered in the BEA survey is aggregated by the BEA and used in various reports it issues.  An example of such a report is available here.

The Act provides that information provided to the BEA may be used only for analytical or statistical purposes.  Without prior written permission from the provider, the information filed with the BEA cannot be presented in a manner that allows the provider to be individually identified and the information cannot be used for purposes of taxation, investigation, or regulation. Copies of the information supplied to the BEA or retained in the provider’s files are also immune from legal process.

Does the Form BE-12 reporting requirement apply to any US business merely if 10% or more of its voting interests are held by a foreign person at the end of the relevant period?

The short answer is generally “yes.”  There is no de minimis investment (in terms of dollars) to which the filing obligation of a US affiliate does not apply; however, as described further below, the percentage ownership and the size of the US business together determine the complexity of the Form BE-12 that must be filed.  There is no exception for publicly-traded companies.  In addition, US private funds 2 are generally not considered to be subject to the Form BE-12 reporting requirement for US affiliates (i.e., a US private fund with a foreign parent) unless the foreign parent, through the fund, indirectly holds a 10% or greater interest in a US operating business.

What is a voting interest?

The starting point for the BE-12 filing requirement is the concept of a “US affiliate” of a foreign person, which is defined as any “U.S. business enterprise in which a foreign person … owned or controlled, directly or indirectly, 10 percent or more of the voting securities in an incorporated [US] business enterprise, or an equivalent interest in an unincorporated U.S. business enterprise, at the end of the business enterprise’s fiscal year that ended in the calendar year covered by the survey.”  For most business enterprises (and for purposes of the Form BE-12 reports), this means that ownership is assessed as of the fiscal year ended December 31, 2022. 

Common stock of an incorporated entity is considered a voting interest; however, preferred stock without voting rights is generally not a voting interest. 

For limited liability companies (LLCs), the BEA has specified that the percentage of voting interest is not based on the percentage of ownership in the LLC’s equity. Rather, LLCs are presumed to be controlled equally by each of its members (owners), unless a clause to the contrary is contained in the articles of organization or in the operating agreement. Even if one member is designated as the managing member responsible for the day-to-day operations of the LLC, this does not necessarily transfer control of the LLC from the non-managing members to the managing member. For example, if the managing member must obtain member approval for annual operating budgets and for other decisions relating to other significant business issues, then the managing member is not presumed to have a 100% voting interest in the LLC.

For limited partnerships, the presumption appears to swing in the opposite direction.  In most cases, the general partner is presumed to control a limited partnership, and therefore, to have a 100% voting interest in the limited partnership. 

What are the different types of Form BE-12 and what determines which form is applicable?

Form BE-12A is the most lengthy of the survey forms (36 pages including instructions) and is reserved for US affiliates meeting the following two requirements as of the fiscal year-end:  (1) a majority of its voting interests are, directly or indirectly, owned by one or more foreign parents, and (2) the US affiliate has assets, sales, or net income (or loss) greater than $300 million. 

Form BE-12B is a bit shorter than Form BE-12A (26 pages including instructions). This form is applicable to a US affiliate that is not subject to reporting on Form BE-12A if it has assets, sales, or net income (or loss) greater than $60 million. 

Form BE-12C is the shortest of the forms (26 pages including instructions). This form is applicable to a US affiliate that is not subject to reporting on Form BE-12A or Form BE-12B (i.e., it has assets, sales, and net income (or loss) less than or equal to $60 million). 

As noted above, each of these filing requirements are applicable only to a US affiliate – that is, a US company whose voting interests are at least 10% owned, directly or indirectly, by a foreign person.  The BEA’s flow chart for determining what form is required is accessible here.  The relevant form for each US affiliate is due May 31, 2023 (or June 30, 2023 if filed electronically).

What information is gathered from the US affiliate?

The precise scope of the information required to be provided by a US affiliate varies depending on the type of form that is applicable.  Generally speaking, all of the reports require certain financial, employment, product, and industry information for the US affiliate and all of its consolidated subsidiaries.  Separate supplements are required for each consolidated subsidiary.  Additional information is required for unconsolidated subsidiaries.  Certain information is also required to be provided up the ownership chain to each foreign person owning at least 10%, directly or indirectly, of the US affiliate’s voting interests.

Form BE-12B requires more extensive information than Form BE-12C, and Form BE-12A requires substantially more information than Form BE-12B or BE-12C.  Depending on which form is applicable and the complexity of a US affiliate’s corporate structure and the complexity of its foreign ownership, answering one of these questionnaires can be a substantial undertaking.  As an example, the BEA estimates that completing the Form BE-12A – the most onerous of the forms – will take between 7.5 and 678 hours per response, with an average completion time of 99 hours per response.

What are the penalties for non-compliance?

Civil fines, injunctive relief and (in the case of willful noncompliance) criminal penalties may be assessed for failure to file the appropriate form.  The BEA will grant reasonable requests for extensions of the time to file.  However, such requests must be filed before May 31, 2023.


The national security, mergers and acquisitions and competition practices at Hunton Andrews Kurth LLP will continue to monitor the development of this survey and applicable rules. Please contact us if you have any questions or would like further information or our assistance.

1 Business enterprises include all manner of incorporated and unincorporated organizations or ventures (including ownership of real estate) that are for purposes of profit making or economic advantage.

2 Under BEA guidance, “Private fund” refers to the same class of financial entities that must report to the Securities and Exchange Commission as private funds on Form PF: i.e., “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 … [the Investment Company] Act.”