Glossary · Entity & Business
CFC
A CFC is a foreign company more than 50% owned by US persons. US owners of a CFC face anti-deferral rules (like GILTI/NCTI and Subpart F) and information reporting on Form 5471. A US-owned UK limited company is usually a CFC.
Controlled Foreign Corporation
In more detail
When US persons own more than half of a foreign corporation, it is a controlled foreign corporation, and the US applies anti-deferral rules so its owners can be taxed currently on certain income rather than only on distribution. For an American running a UK limited company, CFC status typically brings Form 5471 filing and GILTI/NCTI exposure, which is why incorporation decisions must be modelled across both tax systems.
Related terms
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