Forming a New US Business and foreign to the US please read the following!

An often overlooked reporting responsibility is the BE-13. This is not a US tax form but was put in place to collect information on foreign investment in the US. It is administered by the United States Bureau of Economic Analysis (“BEA”) and not the IRS.

Purpose

The BE-13 survey collects data on the acquisition or establishment of U.S. business enterprises by foreign investors and the expansion of existing U.S. affiliates of foreign companies to establish a new production facility. The data collected on the survey are used to measure the amount of new foreign direct investment in the United States, assess the impact on the U.S. economy, and based on this assessment, make informed policy decisions regarding foreign direct investment in the United States.

Responsibilty

If you are investing in the US you must file a BE-13 within 45 days of establishing the business in the US. However, if your investment is under $3 million then your reporting obligation shifts from filing the BE-13 to filing a FORM BE-13 Claim for Exemption.

Penalties

They are harsh. Here is an exceprt from the form –

Whoever fails to report may be subject to a civil penalty of not less than $2,500, and not more than $32,500, and to injunctive relief commanding such person to comply, or both. Whoever willfully fails to report shall be fined not more than $10,000 and, if an individual, may be

imprisoned for not more than one year, or both. Any officer, director, employee, or agent of any corporation who knowingly participates in such violation, upon conviction, may be punished by a like fine, imprisonment, or both. (22 U.S.C. 3105.)

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Written by John M Matras CPA

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