BEA Series Definitions
The series available from these pages are described here. For a more detailed discussion of them and the methodologies used to prepare the estimates, see Foreign Direct Investment in the United States: Final Results from the 1997 Benchmark Survey available at http://www.bea.gov/bea/ARTICLES/INTERNAT/FDINVEST/Meth/fdius97text.pdf.
Direct investment. Investment in which a resident of one country obtains a lasting interest in, and a degree of influence over the management of, a business enterprise in another country. For statistical purposes, foreign direct investment in the United States (FDIUS) is defined as the ownership or control, directly or indirectly, by one foreign resident of 10 percent or more of the voting securities of an incorporated U.S. business enterprise or the equivalent interest in an unincorporated U.S. business enterprise.
U.S. affiliate. A U.S. business enterprise in which a single foreign investor (that is, a foreign parent) owns at least 10 percent of the voting securities or the equivalent.
Foreign parent. The first person outside the United States in a U.S. affiliate's ownership chain that has a direct investment interest in the affiliate. “Person” is broadly defined to include any individual, corporation, branch, partnership, associated group, association, estate, trust, or other organization and any government (including any corporation, institution, or other entity or instrumentality of government). A “foreign” person is any person resident outside the United States--that is, outside the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and all U.S. territories and possessions.
Direct investment capital flows. Funds that foreign parent companies provide to their U.S. affiliates net of funds that U.S. affiliates provide to their foreign parents. Includes the funds that foreign direct investors pay to unaffiliated U.S. residents when affiliates are acquired, the funds that foreign investors receive from them when affiliates are sold, and debt and equity transactions between U.S. affiliates and members of their foreign parent groups. Capital inflows arise from transactions that increase U.S. liabilities or decrease U.S. assets. Capital outflows arise from transactions that decrease U.S. liabilities or increase U.S. assets.
Direct investment capital flows consist of equity capital, intercompany debt, and reinvested earnings. Equity capital flows are the net of equity capital increases and decreases. Equity capital increases consist of payments by foreign parents to unaffiliated third parties in the United States for the purchase of capital stock when they acquire an existing business, payments made to acquire additional ownership interests in their U.S. affiliates, and capital contributions to their U.S. affiliates. Equity capital decreases are the funds foreign parents receive from U.S. persons when they reduce their equity interest in their U.S. affiliates. Intercompany debt flows result from changes in net outstanding loans between foreign parents (or other members of the foreign parent group) and their U.S. affiliates, including loans by parents to affiliates and loans by affiliates to parents. Reinvested earnings are the foreign parents’ claim on the current-period undistributed earnings of the U.S. affiliates.
Foreign direct investment position in the United States. The value of foreign direct investors’ equity in, and net outstanding loans to, their U.S. affiliates. The position may be viewed as the foreign direct investors’ net financial claims on their U.S. affiliates, whether in the form of equity (including retained earnings) or debt.
Direct investment income is the return on the foreign direct investment position in the United States. It consists of earnings (that is, the foreign parents’ shares in the net income of their U.S. affiliates) and the net interest paid by the U.S. affiliates on outstanding loans and trade accounts between the U.S. affiliates and their foreign parent groups.
Royalties and license fees represent receipts and payments between U.S. affiliates and their foreign parents for the use or sale of intangible property or rights (including patents, trademarks, and copyrights).
Other private services represent receipts and payments between U.S. affiliates and their foreign parents for services provided to one another. They consist of service charges, including management fees and allocated expenses, rentals for tangible property, and film and television tape rentals.