Is a foreign corporation owned equally by 100 unrelated U.S. citizens considered to be a controlled foreign corporation...
Is a foreign corporation owned equally by 100 unrelated U.S. citizens considered to be a controlled foreign corporation (CFC)?
Homework Answers
A controlled foreign corporation refers to a company which has registered and having its operations outside the jurisdiction of its home country but owned/controlled by its controlling owners in its home country.
Control and independence are defined with different criterion in different countries.However in the U.S it is seen in terms of percentage of shares owned by the citizens.
Here controls refers to holding atleast more than 50% of the voting rights in the company and also own 10% in the company .
The above criterion mentioned is the minimum to be held. In the given case, the foreign corporation is owned entirely by 100 U.S citizens equally ie., more than 50% voting rights and more than 10% in the company..Hence the above foreign corporation is a CFC in accordance with the U.S laws.
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