What is a Controlled Foreign Corporation (CFC)?

A corporate entity is considered a controlled foreign corporation (CFC) if it is registered or conducts operations in a different country or jurisdiction than the controlling owners' residency.

The laws of controlled foreign corporations work alongside tax treaties – they dictate how taxpayers should report on their foreign income. A controlled foreign corporation is beneficial 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 company grow.