Structure and activity of foreign affiliates (FATS)
The statistics on the structure and activity of foreign affiliates (Foreign Affiliates Statistics – FATS) are based on Regulation (EC) No 716/2007 of the European Parliament and of the Council of 20 June 2007 and provide information concerning characteristics on cross-border controlled enterprises. A distinction is made between characteristics on enterprises in Germany that are controlled by foreign investors (inward FATS) and characteristics on enterprises abroad that are controlled by German investors (outward FATS). The data on inward FATS are provided by the Federal Statistical Office, while the data on outward FATS are collected and compiled by the Deutsche Bundesbank.
For the first time, the Bundesbank has published on the internet a very detailed breakdown of outward FATS data by country and economic activity for the period 2008 to 2011. Following publications appear annually (usually in November), containing data on the previous four years.
In accordance with our revision practices, the results for the most recent reporting date are provisional.
Pursuant to the FATS Regulation, outward FATS comprise three characteristics on foreign affiliates.
Number of affiliates abroad that are ultimately controlled by German investors
Number of employees of these foreign affiliates (measured in full-time equivalents)
Annual turnover (annual production value at banks) of these foreign affiliates
All direct or indirect majority stakes in enterprises abroad (including branches and permanent establishments) are included in the calculation of outward FATS variables, provided they are ultimately controlled by German investors. Control is the ability to determine the business policy of a dependent enterprise. In practice, an investor is deemed to have control if they hold (directly and/or indirectly) more than 50% of the shares or voting rights. Owing to the reporting threshold that applies to the foreign direct investment stock statistics, outward FATS likewise only contain characteristics on cross-border controlled enterprises whose total assets exceed €3 million or the equivalent thereof.
Economic activities are classified in line with the internationally harmonised classification of economic activities, NACE Rev 2, according to the main focus of the foreign affiliates’ activities. FATS do not include Section A: Agriculture, forestry and fishing, and Section O: Public administration and defence; compulsory social security.
For insurance companies and banks, a different definition of annual turnover applies.
For insurance companies, instead of annual turnover, gross premiums written and assumed under insurance contracts are recorded.
For banks, instead of annual turnover, annual production value is recorded. This comprises net interest received, current income from shares and other variable-rate securities, commissions received, net profit or loss on financial operations and other net operating income.
In Germany, outward FATS are closely linked to the foreign direct investment stock statistics. External sector reporting serves as the basis for compiling external sector statistics. Each year, all domestic banks, enterprises, individuals and public authorities participating in foreign trade are required to report detailed data on their cross-border equity investment (foreign direct investment) should the investment enterprise’s total assets exceed €3 million (or the equivalent thereof).
The information required for outward FATS is based on the annual reports on residents’ assets abroad and must be submitted by virtue of the reporting requirements in section 11 (3) of the Foreign Trade and Payments Act (Außenwirtschaftsgesetz) as well as in section 64 of the Foreign Trade and Payments Regulation (Außenwirtschaftsverordnung). The data are used for statistical purposes only. Pursuant to section 11 (5) of the Foreign Trade and Payments Act in conjunction with section 16 of the Act on Statistics for Federal Purposes (Gesetz über die Statistik für Bundeszwecke), all individual data are subject to statistical confidentiality.