BE-11 Reporting Requirements: What New Jersey Businesses Need to Know
Welcome back to our ongoing BEA reporting series. This is article number eight! Last time, we unpacked the details of the BE-10 benchmark survey, essential for New Jersey businesses with direct investment abroad. Today, we're shifting gears slightly to talk about the BE-11 annual survey. Although similar in concept, this particular report collects information annually, specifically from U.S. entities with foreign affiliates. We understand that sorting through these mandatory reporting requirements can be daunting. So, let's break them down together clearly and simply so your business stays compliant without confusion.
Key Terms You Should Know
Before diving into the specifics of the BE-11 annual survey, let's simplify things a bit by first defining a few key terms you'll encounter frequently.
U.S. Reporter: When the BEA refers to a "U.S. Reporter," it's talking about any U.S.-based entity or individual with at least a 10% voting interest or its equivalent in overseas companies. Simply put, if your New Jersey business owns significant shares abroad, you're likely considered a U.S. Reporter.
Foreign Affiliate: A foreign affiliate refers to a business enterprise located outside the United States in which your New Jersey-based entity or you individually own at least 10% of voting securities or equivalent interest. These affiliates are the central focus when the BEA's annual survey collects information.
Majority-Owned Affiliate: When your direct investment abroad includes more than half of a foreign company's voting shares, that company is considered your majority-owned affiliate. BE-11 reporting forms specifically address these affiliates due to their significant impact on economic analysis.
Minority-Owned Affiliate: Foreign affiliates where your U.S.-based entity owns between 10% and 50% of the voting interest fall under the minority-owned affiliate category. The BEA annual survey collects information on these affiliates separately to gauge overall U.S. foreign direct investment trends.
Direct Investment Abroad: The phrase "direct investment abroad" refers to owning or controlling at least 10% or more of voting shares in any incorporated or unincorporated foreign business enterprise. These investments form the foundation for mandatory reporting requirements, ensuring accurate economic analysis.
What Is the BE-11 Report
Great — now that we've covered some important definitions, let's clarify exactly what the BE-11 annual survey is and why it matters to your New Jersey business.
Conducted each year by the Bureau of Economic Analysis (BEA), this annual survey collects information specifically about U.S. direct investment abroad. Unlike the BE-10 benchmark survey, which occurs every five years, BE-11 gathers operational and financial data annually, including critical metrics like net income, total assets, sales figures, and intercompany trade between parent companies and their foreign affiliates.
This detailed data enables precise economic analysis that policymakers rely on to assess global economic impacts and make informed decisions regarding U.S. multinational enterprises. Understanding these reporting requirements is essential not just to avoid compliance headaches but also to gain clear insights into your business's international presence.
Who Must File the BE-11 Report?
You're probably asking yourself, "Does my business need to worry about BE-11 compliance?" Let's break that down clearly.
Essentially, if your business directly or indirectly holds at least 10% voting stock or an equivalent interest in any foreign business — whether it’s an incorporated foreign business enterprise or an unincorporated foreign business enterprise — you're required to file the BE-11 report. Both majority-owned affiliates, where your ownership exceeds 50%, and minority-owned affiliates, falling between 10% and 50% ownership, trigger these reporting requirements.
Think about it practically: Say you run a manufacturing firm based in New Jersey that controls 60% of a production facility in Germany. You're dealing with a majority-owned affiliate, making filing mandatory. On the other hand, perhaps your tech startup owns a 25% stake in an Asian software company — you are still required to file, though now dealing with a minority-owned affiliate. Either way, accurately reporting this investment data helps inform economic analysis, keeps your business compliant, and ensures you're well-positioned globally.
Types of BE-11 Forms and Requirements
There isn't just one BE-11 form — rather, the form your business needs to file depends largely on the financial scale of your company and your overseas investments. Here's how it works:
BE-11A: This is the primary report your U.S. parent company must file if it owns 10% or more of one or more foreign affiliates. If your domestic business has total assets, sales, or net income exceeding $300 million, you'll need to complete the entire form. If all three figures are $300 million or less, you still have to file, but only certain sections, specifically, Items 1 through 30 and 60 through 62, are required. Either way, BE-11A serves as the core document capturing your company’s overall profile in the context of direct investment abroad.
BE-11B: You must file this form if your business holds more than 50% ownership (i.e., a majority-owned affiliate) in any incorporated or unincorporated foreign business that has over $60 million in total assets, sales or gross operating revenues (excluding sales taxes), or net income after foreign taxes. You may also be required to file if the affiliate owns another non-exempt foreign affiliate, even if it falls below this threshold.
BE-11C: This report applies to minority-owned foreign affiliates (where U.S. ownership is at least 10% but no more than 50%) if any one of the following exceeds $60 million: total assets, sales or gross operating revenues (excluding sales taxes), or net income after foreign taxes. Filing may also be required if the affiliate owns another reportable foreign affiliate, even if it falls below the threshold.
BE-11D: Required if your business acquired or established a new foreign affiliate during the fiscal year and any one of its total assets, sales (excluding sales taxes), or net income after foreign taxes is over $25 million but does not exceed $60 million
Selecting and filing the correct form ensures your business not only avoids costly penalties but contributes to vital economic data used to guide U.S. multinational enterprises globally. A New Jersey business lawyer can provide valuable guidance, helping you accurately file the right BE-11 forms and avoid unnecessary complications.
What Happens if You Don’t File the BE-11?
Failing to adhere to BE-11 reporting requirements carries real consequences that New Jersey business owners cannot afford to ignore. Penalties for not filing the necessary survey forms are serious: civil penalties of up to $25,000 per violation. In cases of deliberate non-compliance, criminal charges can also be imposed, leading to potential fines as high as $10,000 and imprisonment for up to one year. Clearly, proactively meeting your BE-11 obligations isn't just prudent — it's necessary for safeguarding your business against serious legal and financial threats.
But what if you're unsure whether you still need to file? Perhaps your business filed a BE-11 form last year but doesn't meet the criteria now, or maybe the BEA directly contacted your company about reporting, but your foreign affiliates no longer meet the thresholds. In either scenario, doing nothing isn't an option — you must submit an exemption claim to clearly document your status. Utilizing BEA’s user-friendly eFile system will streamline your submission process, significantly reducing your compliance burden and ensuring your business remains in good standing.
Conclusion
Staying compliant safeguards your New Jersey business from significant financial and legal risks. By proactively filing the appropriate BE-11 forms or exemption claims when necessary, you can avoid costly penalties and maintain peace of mind. If you're unsure whether your New Jersey business qualifies this year, a business lawyer can help clarify your obligations.
In our next article, we’ll take a closer look at the BE-577, what it covers, who needs to file, and how it fits into your quarterly reporting obligations.
Are you wondering about any of the issues mentioned above? Please email us at Info@staturelegal.law or call (732) 320-9831 for assistance.
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