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

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**Canonical URL:** [BPM7 Annex 6. Selected Issues on Direct Investment: Annotated Outline](https://www.imf.org/-/media/files/data/statistics/bmp7/final-annotated-outlines/bpm7-annex-6-selected-issues-on-direct-investment-annotated-outline.pdf)

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### I. Introduction
- The annex updates BPM6 Appendix 6a and will give an overview of direct investment by pulling together relevant information from the main part of the Manual, which is organized according to accounts rather than topics.
- New feature: the annex will go more into depth on certain issues that are only briefly described in the main part of the Manual.
- Separate sections in the annex: 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).
- Further changes may be made to improve consistency of language with other macroeconomic statistics manuals (e.g., 2025 SNA).
- The annex will include references to the fifth edition of the OECD Benchmark Definition of Foreign Direct Investment throughout the annex.

### II. Overview of Direct Investment
- References in this section will be updated throughout this annex.

### III. Ultimate Ownership and Pass-Through Funds
- Per GN D.6, the annex will present a supplementary framework for direct investment statistics by the ultimate investing economy (UIE) and the ultimate host economy (UHE) and for identification of pass-through funds.
- To support cross-country comparability:
  - The “winner takes all” approach will be recommended as the preferred approach for the UIE.
  - The reallocation of positions to the first operating unit(s) will be recommended for the UHE.
- Per GN G.2, the annex will include a reference to the concept of ultimate controlling parent.
- The annex will describe the proportional approach and the IFRS consolidation method to illustrate the concepts of UIE and UHE and to guide their use and interpretation.
- The annex will include an indicator of pass-through funds based on the residency of the ultimate investor.

### IV. Corporate Inversions
- Per GN D.4, the annex will contain the official definition of corporate inversions.
- The annex will provide a taxonomy of the most usual cases of corporate actions that involve inversions or other forms of restructuring with similar economic effects.
- The annex will include strengthened guidance on publishing details on corporate inversions.
- As in BPM6, these presentations would remain supplementary and at the discretion of the reporting economy.

### V. Public-Private Partnerships
- Per GN D.8, the annex will provide guidance on the concepts, definitions, scope, and statistical treatment of public-private partnerships (PPPs) under direct investment.
- Detailed guidance will be provided on applying existing guidance on branches and notional units in the case of PPP arrangements.
- The annex will clarify the role of economic and legal ownership of assets in PPPs.

### VI. Cash Pooling
- Per GN D.18, the annex will include a description of the main types of cash pooling arrangements:
  - single legal account,
  - physical cash pool,
  - notional cash pool.
- The annex will specify the different statistical treatments for these types of cash pooling arrangements.

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

### Schematic Overview
- 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 and Key Stakeholders Consulted
- References:
  - GNs D.1, D.4, D.6, D.8, D.18, and G.2. These guidance notes are posted at Update of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) (imf.org).
  - BPM6, Appendix 6a.
- Key Stakeholders Consulted:
  - Balance of Payments Task Team
  - System of National Accounts Lead Editor
  - Global Consultation of the External Sector Statistics Community

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/final-annotated-outlines/bpm7-annex-6-selected-issues-on-direct-investment-annotated-outline.pdf_