# 31 C.F.R. § 850.206 (2026): Controlled foreign entity

> Federal · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_206

## Section

- **Citation:** 31 C.F.R. § 850.206 (2026)
- **Heading:** Controlled foreign entity
- **Jurisdiction:** Federal
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Title 31 CFR: Money and Finance: Treasury / Chapter VIII: OFFICE OF INVESTMENT SECURITY, DEPARTMENT OF THE TREASURY / Part 850: PROVISIONS PERTAINING TO U.S. INVESTMENTS IN CERTAIN NATIONAL SECURITY TECHNOLOGIES AND PRODUCTS IN COUNTRIES OF CONCERN / Subpart B: Definitions / § 850.206: § 850.206   Controlled foreign entity.

## Text

(a) The term
controlled foreign entity
means any entity incorporated in, or otherwise organized under the laws of, a country other than the United States of which a U.S. person is a parent.
(b) For purposes of this term, the following rules shall apply in determining whether an entity is a parent of another entity in a tiered ownership structure:
(1) Where the relationship between an entity and another entity is that of parent and subsidiary, the holdings of voting interest or voting power of the board, as applicable, of a subsidiary shall be fully attributed to the parent.
(2) Where the relationship between an entity and another entity is not that of parent and subsidiary (
i.e.,
because the holdings of voting interest or voting power of the board, as applicable, of the first entity in the second entity is 50 percent or less), then the indirect downstream holdings of voting interest or voting power of the board, as applicable, attributed to the first entity shall be determined proportionately.
(3) Where the circumstances in paragraphs (b)(1) and (2) of this section apply (
i.e.,
because a U.S. person holds both direct and indirect downstream holdings in the same entity), any holdings of voting interest shall be aggregated for the purposes of applying this definition, and any holdings of voting power of the board shall be aggregated for the purposes of applying this definition. Voting interest shall not be aggregated with voting power of the board for the purposes of applying this definition.

## Nearby sections

- [31 C.F.R. § 850.201 (2026) § 850.201   Advanced packaging.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_201.md)
- [31 C.F.R. § 850.202 (2026) § 850.202   AI system.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_202.md)
- [31 C.F.R. § 850.203 (2026) § 850.203   Certification.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_203.md)
- [31 C.F.R. § 850.204 (2026) § 850.204   Completion date.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_204.md)
- [31 C.F.R. § 850.205 (2026) § 850.205   Contingent equity interest.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_205.md)
- [31 C.F.R. § 850.206 (2026) § 850.206   Controlled foreign entity.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_206.md)
- [31 C.F.R. § 850.207 (2026) § 850.207   Country of concern.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_207.md)
- [31 C.F.R. § 850.208 (2026) § 850.208   Covered activity.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_208.md)
- [31 C.F.R. § 850.209 (2026) § 850.209   Covered foreign person.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_209.md)
- [31 C.F.R. § 850.210 (2026) § 850.210   Covered transaction.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_210.md)
- [31 C.F.R. § 850.211 (2026) § 850.211   Develop.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_211.md)
- [31 C.F.R. § 850.212 (2026) § 850.212   Entity.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_212.md)
- [31 C.F.R. § 850.213 (2026) § 850.213   Excepted transaction.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_213.md)
- [31 C.F.R. § 850.214 (2026) § 850.214   Fabricate.](https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_214.md)

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/CFR_T31_P850_S850_206. Check the current official text before relying on it. Not legal advice.