June 2, 2015
Current News Update for American Expats: There currently are reports around the internet on expat forums describing severe penalties for American owners of foreign corporations/enterprises who have not yet filed US Commerce BE-10 forms.
Some sharp readers are asking if we are required to file BE-10 forms for their Mexican corporations that hold their personal real estate, homes, properties, etc.
I drilled into the US Govt’s BE-10 websites and found that the answer is “NO”.
Starting with the official FAQ section, there’s one interesting official answer to a key question relating to filing requirements for American citizens who own personal property in a foreign country using a corporation:
A BE-10 report is required of any U.S. person* that had direct or indirect ownership or control of at least 10 percent of the voting stock of an incorporated foreign business enterprise – or an equivalent interest in an unincorporated foreign business enterprise – at any time during the U.S. person’s 2014 fiscal year.
A U.S. person that has been contacted by BEA for filing the BE-10 must file a BE-10 Claim for Not Filing form if it does not meet the above filing requirements. However, a U.S. person that does not meet the reporting requirements and that has not been contacted by BEA is not required to report any BE-10 form to BEA.”
– See more at: http://www.bea.gov/f…h.MaLanXbc.dpuf ”
http://www.bea.gov/f…tart=0&cat_id=0
That leads us to: Who “does not meet the reporting requirements” ?
If we ignore internet rants by people irritated with the US Govt., and INSTEAD READ THE US REGULATIONS, we find that corporations set up for holding foreign real estate for personal use ARE FULLY EXEMPT – and ARE NOT REQUIRED TO FILE ANY BE-10 FORM to BEA:
“BE-10 INSTRUCTIONS (REV. 12/2014) Page 7
H. Real estate –The ownership of foreign real estate is defined to be a business enterprise and, if foreign real estate is owned by a U.S. person, it is a foreign affiliate of a U.S. Reporter. Real estate that is normally included in the property, plant, and equipment account of a foreign affiliate is not to be reported as a separate affiliate.
Residential real estate held exclusively by a U.S. person for personal use and not for profit-making purposes is not subject to the reporting requirements. A primary residence abroad that is leased to others while the owner is a U.S. resident, but which the owner intends to reoccupy, is considered real estate held for personal use. Ownership of foreign residential real estate by a business enterprise, the sole purpose of which is to hold the real estate for the personal use of the owner(s) of the business enterprise, is considered to be real estate held for personal use and therefore not subject to the reporting requirements. ”
………
Continuing for Americans who do own 10% of a foreign business that is not a real estate holding corporation:
Requirements: One legal accounting website describes: “As this is a “benchmark year,” this reporting is required of all relevant persons, regardless of whether the Reporter has been contacted by the BEA to do so; publication in the Federal Register is considered notice to all persons required to report.”
http://cdn.akingump….ey-Reportin.pdf
“Business Enterprise” means any organization, association, branch or venture which exists for profit – making purposes or to otherwise secure economic advantage, and any ownership of any real estate.”
Next Requirement: The formal filing deadline for Americans (with fewer than less than 50 interests in foreign businesses) is May 31, 2015, but the Feds have offered a 30 day extension, (to June 30, 2015) if you use this form:
http://www.bea.gov/s…equest Form.pdf
Next: The basic BE-10A form is at http://www.bea.gov/s…0/be10a_web.pdf
The instructions say that individuals fill out only items 1, 2, & 5 of BE-10A,
plus BE-10B, C, & D “as appropriate”.
Key citations on filing:
“U.S. Reporter that is an individual, estate, trust, or nonprofit organization –
A U.S. Reporter that is an individual, estate, trust, or religious, charitable, or other nonprofit organization, and that owns a foreign affiliate directly, rather than through a U.S. business enterprise, should complete only items 1, 2 and 5 of Form BE-10A and attach an explanatory note attesting to its status.
Required Forms BE-10B, BE-10C, and BE-10D must be filed as appropriate.”
https://www.bea.gov/…nstructions.pdf
“ It (Section 801.8 of 15 CFR, Chapter VIII) also requires that persons, or their agents, who are contacted by BEA about reporting in this survey, either by sending them report forms or by written inquiry, must respond in writing. They may respond by:
• filing the properly completed BE-10 report by May 29, or June 30, 2015, as required;
• completing and returning the “BE-10 Claim for Not Filing” by May29, 2015; or
• certifying in writing, by May 29, 2015, to the fact that the person had no direct investment within the purview of the reporting requirements of the BE-10 survey.”
So, if an American is required to file, then we have to file the first time in writing, and after that the Commerce Dept issues us a number/ID for future years filing on-line.
As we gain more information, we will update this article.
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Disclaimer: This information is not meant as legal advice. It is for educational and informational purposes only. Government policies vary between States and offices, and Mexican Government officials have broad discretion in how they individually enforce policies, so, your personal experiences may vary. See a professional for advice on important issues.
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© Steven M. Fry
Surviving Yucatan 
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