Controlled Foreign Companies
Controlled foreign companies (CFCs) are companies based overseas but controlled by New Zealand residents. They must not be a tax resident in New Zealand, or if a New Zealand tax resident, they must then be treated as a foreign company via the application of a relevant double tax treaty agreement.
A company may be a tax resident in New Zealand if it is incorporated in New Zealand, has its head office in New Zealand, its centre of management is in New Zealand, or directorship control is exercised from New Zealand.
There are three tests for determining the CFC status of a foreign company: