Foreign Investment Reporting to the United States: In-Bound Investment into the United States

Businesses making investments in the United States, directly or indirectly, are required to report this investment to the United States government.  This “in-bound” investment is reported to the United States Department of Commerce, through its Bureau of Economic Analysis (BEA).  This is the first in a series of posts on the subject.

The BEA promotes a better understanding of the U.S. economy by preparing official economic statistics. These statistics provide accurate and relevant economic information that helps gauge the performance of the U.S. economy and the role of the U.S. in the global economy. The statistics on foreign direct investment in the United States are an important component of that performance.

BEA conducts seven (7) mandatory surveys to collect information on direct investment. These seven surveys consist of an initial survey for any new in-bound direct investment, and then applicable quarterly, annual, and 5-year benchmark surveys.  The purpose of the new foreign direct investment survey is to capture new investment transactions when a foreign direct investment relationship is created.  The purpose of the quarterly survey is to report positions and transactions between a U.S. affiliate and its foreign parents, and between the U.S. affiliate and the foreign affiliates of the foreign parents.  The purpose of the annual survey is to report annual financial and operating data of U.S. affiliates. The benchmark survey is conducted every five years, and provides the most comprehensive coverage of business entities, transactions, and data on foreign investment in the U.S.

Reporting on BEA’s direct investment surveys is mandatory under the International Investment and Trade in Services Survey Act. The Act ensures the confidentiality of the reported data. Survey data may only be used for statistical and analytical purposes, and the data is limited to officials and employees of specified government agencies.   Strict penalties may apply for failure to comply the survey requirements.

About the Author

Erik P. Doerring
Erik leads the firm's economic development and tax practices. He is a business lawyer, with the skills of a tax litigator. Prior to joining McNair, Erik was an attorney with the IRS Office of Chief Counsel and the U.S. Department of Justice, Tax Division.

About the Author

Erica Wells
Erica is McNair's legal intern who was born and raised in Irmo, South Carolina. After getting her degree in early childhood education at the University of Georgia, she currently attends the University of South Carolina School of Law.