## BPM7 Annex 6. Selected Issues on Direct Investment: Annotated Outline

## Source details

**Canonical URL:** [BPM7 Annex 6. Selected Issues on Direct Investment: Annotated Outline](https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-6.pdf)

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### I. Introduction
- Annex provides an overview of direct investment by synthesizing relevant material from the main part of the Manual organized by accounts, and adds more in-depth treatment of selected issues.
- New separate sections to cover:
  - overview of direct investment (Section I)
  - ultimate ownership and pass-through funds (Section II)
  - corporate inversions (Section III)
  - public-private partnerships (Section IV)
  - cash pooling (Section V)
  - greenfield investment and extension of capacity (Section VI)
- The annex will include a Schematic Overview for details.
- Further language changes may be made to improve consistency with other macroeconomic statistics manuals (e.g., 2025 SNA).
- The annex will reference the fifth edition of the OECD Benchmark Definition of Foreign Direct Investment throughout.

### II. Overview of Direct Investment
- References in this section will be updated throughout to reflect current guidance.

### III. Ultimate Ownership and Pass-Through Funds
- Presents a supplementary framework for direct investment statistics by:
  - ultimate investing economy (UIE)
  - ultimate host economy (UHE)
  - identification of pass-through funds
- To support cross-country comparability:
  - Recommends the “winner takes all” approach as the preferred approach for the UIE.
  - Recommends reallocation of positions to the first operating unit(s) for the UHE.
- Per GN G.2, the concept of ultimate controlling parent will be referenced.
- Will describe alternative approaches to illustrate concepts and guide interpretation:
  - the proportional approach
  - the IFRS consolidation method
- Will include an indicator of pass-through funds based on the residency of the ultimate investor.

### IV. Corporate Inversions
- Per GN D.4, will contain:
  - the official definition of corporate inversions
  - a taxonomy of typical corporate actions that involve inversions or restructurings with similar economic effects
  - strengthened guidance on publishing details on corporate inversions
- Presentations on corporate inversions remain supplementary and at the discretion of the reporting economy (as in BPM6).

### V. Public-Private Partnerships
- Per GN D.8, will provide guidance on:
  - concepts, definitions, scope, and statistical treatment of public-private partnerships (PPPs) under direct investment
  - detailed application of existing guidance on branches and notional units in PPP arrangements
  - clarification of the role of economic and legal ownership of assets in PPPs

### VI. Cash Pooling
- Per GN D.18, will describe main types of cash pooling arrangements and their statistical treatments:
  - single legal account
  - physical cash pool
  - notional cash pool

### VII. Greenfield Investment and Extension of Capacity
- Per GN D.1, will include guidance on:
  - definition and collection of supplementary data on greenfield investment and extension of capacity
  - data collection should cover both equity (other than reinvestment of earnings) and debt instruments, excluding the “pass-through” funds, if possible
  - recording should be on net inward direct investment

### Schematic Overview
- Sections listed in the schematic:
  - I Overview of Direct Investment
  - II Ultimate Ownership and Pass-Through Funds
  - III Corporate Inversions
  - IV Public-Private Partnerships
  - V Cash Pooling
  - VI Greenfield Investment and Extension of Capacity

### References
- Guidance notes referenced: GNs D.1, D.4, D.6, D.8, D.18, and G.2.
- References to BPM6, Appendix 6a.
- Guidance notes are posted at Update of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) (imf.org).

### Key Stakeholders Consulted
- Balance of Payments Task Team
- System of National Accounts Lead Editor

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-6.pdf_