A new week means a new newsletter that we know will be useful to you. Especially in this issue for all our readers with an LLC in the United States. (If you have not yet established your company and want to do so, we have all the information you need in our BLOG)
If in 2022 or before you created an LLC or C Corporation in the United States, you live abroad and have at least 10% ownership in the company then in 2023 you will have to fulfill an obligation that is required every 5 years (and just this year your presentation). This obligation consists of sending Form BE-12 to the United States Bureau of Economic Analysis (BEA).
Since we have access to certified professionals who know the latest tax laws and regulations, we make them available to accompany you through this process.
The purpose of this survey is to find out information about the investments made in the country by foreigners: collecting data from both the company, its owners and their investments. This survey is mandatory and is used to compile statistics on foreign investment in the country.
The BEA is not a fiscal entity and therefore does not require the payment of any tax. However, non-compliance may entail a fine, either if it is not delivered or done after the deadline.
VERY IMPORTANT: it is your obligation to send the BE-12 Form even if the BEA does not contact you.
There are different versions of the BE-12 form, each designed to collect specific information based on the type of investment. As the vast majority of companies meet these two conditions: that the foreign partner has more than 10% participation and less than 60 million in income or assets, we focus on Form BE-12C which corresponds to this type of company.
Below we tell you everything you need to know to fulfill this obligation on time.
Who should complete and submit this form?
All LLCs and C Corporations with non-U.S. resident alien owners who own at least 10% ownership in the business must file Form BE-12C with the BEA. This applies to both owners with direct or indirect property, that is, who are final beneficiaries. In addition, the condition is added that the companies have not exceeded 60 million dollars during the fiscal year in any of the following items: assets, gross income or net income (profits/losses). Additionally, the report applies both to companies created in 2022 as well as in previous years, but not to those that have been opened during 2023.
Likewise, it does not apply to companies that were dissolved in 2022. For those that did end that year active and then dissolved in 2023, they are also required to present.
On the other hand, if a company had no activity in 2022, it must still comply with this obligation before the BEA.
To comply, a single form is sent per company, regardless of the number of owners it has. That is, a different form is not filled out for each owner. Of course, if a company is the parent or subsidiary of another, the information is consolidated and a single form is sent to the BEA. In the event that an owner has more than one company, but they are not related to each other, two different forms must be sent: one for each company, even if the final beneficiary is the same.
Periodicity and Terms
The BEA asks companies to report their situation at the end of fiscal year 2022. The deadline will depend on the shipping method used:
May 31: If the form is sent by postal mail
June 30: If the form is submitted online through the BEA eFile system
Fines for non-compliance
Failure to deliver on time, or definitely not submitting Form BE-12C to the BEA, may imply a fine for the company or its owners.
The monetary penalty can be between $5,580 and $55,808 USD. To this can be added an additional $10,000 if this obligation is deliberately breached. It is even possible to expose yourself to a maximum of one year in prison.
Therefore, it is very important if you are a non-resident foreigner who owns an LLC or C Corporation in the United States and you meet the conditions indicated above in this article, to comply with the duty to report even though the BEA has not contacted your company.
If you have created your company with us or you have also made the last IRS Annual Return (Period 2022), we will already have much of the information necessary to comply with this requirement, so it will be easier.
If this is your case or not, contact us immediately to indicate the steps to follow through our CONTACT FORM.