Hello,
I hoping someone can clarify for me. I’m a US citizen. If I am a Director of a Foreign company in a country where I am living as a Permanent Resident, and own 50% of the shares of the company, where my cofounder is not a US Citizen and owns 50% of the company but is not a director. Would my company be a CFC. How about if as Directory I have a tie breaking vote?
Thanks in advance for any knowledge on the topic.
Hello,
Your Foreign Company is not a CFC in the eyes of the IRS:
Controlled Foreign Corporation Defined
A controlled foreign corporation is any foreign corporation in which more than 50 percent of the total combined voting power of all classes of stock entitled to vote is owned directly, indirectly, or constructively by U.S. shareholders on any day during the taxable year of such foreign corporation or more than 50% of the total value of the stock is owned directly, indirectly or constructively by U.S. shareholders on any day during the taxable year of the corporation.