Controlled Foreign Corporation - CFC

Controlled Foreign Corporation - CFC
A corporate entity that is registered and conducts business in a different jurisdiction or country than the residency of the controlling owners. Control of the foreign company is defined, in the U.S., according to the percentage of shares owned by U.S. citizens.

Controlled foreign corporation (CFC) laws work alongside tax treaties to dictate how taxpayers declare their foreign earnings. A CFC is advantageous for companies when the cost of setting up a business, foreign branches or partnerships in a foreign country is lower even after the tax implications, or when the global exposure could help the business grow.

The CFC structure was created to help prevent tax evasion, which was done by setting up offshore companies in jurisdictions with little or no tax. Each country has its own CFC laws, but most are similar in that they tend to target individuals over multinational corporations when it comes to how they are taxed. For this reason, having a company qualify as independent will exempt it from CFC regulations.

Countries differ in how they define the independence of a company. The determination can be based on how many individuals have a controlling interest in the company, as well as the percentage they control. For example, minimums can range from fewer than 10 to over 100 people, or 50% of voting shares, or 10% of the total outstanding shares.


Investment dictionary. . 2012.

Игры ⚽ Поможем написать реферат

Look at other dictionaries:

  • Controlled foreign corporation (CFC) — A foreign corporation whose voting stock is more than 50% owned by U.S. stockholders, each of whom owns at least 10% of the voting power. The New York Times Financial Glossary …   Financial and business terms

  • controlled foreign corporation — (CFC) USA A foreign corporation in which more than 50% of the total combined voting power of its stock or the total value of its stock is owned by United States Shareholders (defined as a United States person (IRC § 957(c)) who owns 10% or more… …   Law dictionary

  • Controlled Foreign Corporation — Taxation An aspect of fiscal policy …   Wikipedia

  • controlled foreign corporation — ( CFC) A foreign corporation whose voting stock is more than 50% owned by US stockholders, each of whom owns at least 10% of the voting power. Bloomberg Financial Dictionary …   Financial and business terms

  • controlled foreign company — (CFC) A company that is: • Resident outside the UK; • Controlled by persons resident in the UK; and • Subject to a lower level of taxation in the territory in which it is resident. Set out in Chapter IV of Part XVII of the Income and Corporation …   Law dictionary

  • CFC — Controlled Foreign Corporation (CFC) USA A foreign corporation in which more than 50% of the total combined voting power of its stock or the total value of its stock is owned by United States Shareholders (defined as a United States person (IRC § …   Law dictionary

  • CFC — CFC, cfc, or Cfc may stand for: *Chlorofluorocarbon : a class of chemical compounds that deplete ozone. *Cardiofaciocutaneous Syndrome : a rare and serious genetic disorder. *Canadian Film Centre : institution for advanced training in film,… …   Wikipedia

  • CFC — Combined Federal Campaign (Governmental » NASA) Combined Federal Campaign (Community) Combined Federal Campaign (Academic & Science » Ocean Science) Combined Federal Campaign (Governmental » Military) Combined Federal Campaign (Governmental » US… …   Abbreviations dictionary

  • CFC — See: controlled foreign corporation …   Financial and business terms

  • United Kingdom corporation tax — Throughout this article, the unqualified term pound and the £ symbol refer to the United Kingdom pound. Taxation in the United Kingdom This article is part of the series: Politics and government of the United Kingdom Central government …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”