Page 18 - The CFIUS Book

THE CFIUS BOOK
1.1.2. Foreign Person6
A foreign Person IS DEFINED TO INCLUDE THE FOLLOWING:
1. Any foreign national, foreign government, or foreign entity; or
2. Any entity over which control is exercised or exercisable by a foreign national, foreign government, or foreign entity.
The CFIUS regulations provide a number of illustrative examples that add some color to the definition; for instance:
In certain cases, a company outside the United States may not be considered a foreign person.
l
In certain cases, a company can be a U.S. business and a foreign person.
l
l
Where U.S. nationals own and control a foreign corporation, that corporation may not be considered a foreign person:
l
Where a corporation is organized outside the United States and only engages in business outside the United States, but all of its shares are owned, and it is controlled, by a company organized in the United States and owned by U.S. nationals, the corporation is not a foreign person. However, if the government of the foreign state where the corporation is organized exercises control of the corporation, it would be considered a foreign person.7
Where Corporation A is organized in the United States, is engaged in interstate commerce in the United States, and is controlled by Corporation X. Corporation X is organized under the laws of a foreign state, its principal place of business is located outside the United States, and 50% of its shares are held by foreign nationals and 50% of its shares are held by U.S. nationals. Both Corporation A and Corporation X are foreign persons. Corporation A is also a U.S. business.
Corporation A is organized under the laws of a foreign state and is owned and controlled by a foreign national. A branch of Corporation A engages in interstate commerce in the United States. Corporation A (including its branch) is a foreign person. The branch is also a U.S. business.8
Corporation A is a corporation organized under the laws of a foreign state and its principal place of business is located outside the United States. Forty-five percent of the voting interest in Corporation A is owned in equal shares by numerous unrelated foreign investors, none of whom has control. The foreign investors have no formal or informal arrangement to act in concert with regard to Corporation A with any other holder of voting interest in Corporation A. Corporation A demonstrates that the remainder of the voting interest in Corporation A is held by
18