Page 21 - The CFIUS Book

Multiple Foreign Person Investors
Generally, where more than one foreign person has an ownership interest in an entity, CFIUS will consider multiple foreign persons as controlling the entity when there are indicia that those foreign persons are likely to coordinate their separate controls.13 CFIUS will examine the following factors:
l Whether the foreign persons are related or have formal or informal arrangements to act in concert;
l Whether foreign person investors are agencies or instrumentalities of the national or subnational governments of a single foreign state; or
l Whether a given foreign person and another person that has an ownership interest in the entity are both controlled by any of the national or subnational governments of a single foreign state.
1.1.3.3. Exercised or not
Where a company has direct or indirect power to determine or decide important matters, CFIUS will consider that to constitute control, even if the company agrees not to exercise that control. Under CFIUS regulations and guidance, if a foreign person has the ability to exercise control over a U.S. business at the time a transaction is consummated, whether at will or after a particular period of time, then the person cannot avoid a determination that ‘‘control’’ exists by voluntarily forgoing, or delaying, the exercise of control.14
1.1.4. U.S. Business15
In determining whether a person is a
U.S. business, CFIUS first will
consider whether the subject of the
transaction is an “entity”. CFIUS
defines an entity as any branch,
partnership, group or sub-group,
association, estate, trust, corporation
or division of a corporation, or
organization. CFIUS also includes assets, whether or not organized as a separate legal entity, operated by any one of the foregoing as a business undertaking in a particular location or for particular products or services. If the subject of the transaction is an entity, CFIUS will consider whether that entity is engaged in interstate commerce.16
THE CFIUS BOOK
A u.s. Business is any entity engaged in interstate commerce in the United States, but only to the extent of its activities in interstate commerce in the United States.
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