Controlled foreign company rules let a country tax its residents on profits held in a foreign company they control, even when those profits have not been distributed. Many countries operate some version, with differing control thresholds and exemptions.
Why does CFC rules matter for founders?
This is how a US LLC can become taxable in your home country regardless of US treatment. Founders who conclude they owe no US tax frequently overlook that their country of residence may tax the same profits, which is why cross-border advice matters before forming.
Where can I read more about CFC rules?
Note: A plain-English definition for orientation, not legal or tax advice. Rules change - last checked 2026-07-21.