---
kind: "section"
citation: "31 C.F.R. § 800.243"
title: "31"
number: "800.243"
heading: "Solely for the purpose of passive investment."
url: "https://uscodex.org/cfr/31/800.243"
---

# §800.243. Solely for the purpose of passive investment.

- (a) Ownership interests are held or acquired solely for the purpose of passive investment if the person holding or acquiring such interests does not plan or intend to exercise control and—
  - (1) Is not afforded any rights that if exercised would constitute control;
  - (2) Does not acquire any access, rights, or involvement specified [§ 800.211(b)](/cfr/31/800.211.md?p=b);
  - (3) Does not possess or develop any purpose other than passive investment; and
  - (4) Does not take any action inconsistent with holding or acquiring such interests solely for the purpose of passive investment. (See [§ 800.302(b)](/cfr/31/800.302.md?p=b).)
- (b) **Example—** Corporation A, a foreign person, acquires a voting interest in Corporation B, a U.S. business. In addition to the voting interest, Corporation A negotiates the right to appoint a member of Corporation B's board of directors. The acquisition by Corporation A of a voting interest in Corporation B is not solely for the purpose of passive investment.

## Notes

### Authority

Authority: 50 U.S.C. 4565; E.O. 11858, as amended, 73 FR 4677.

### Source

Source: 85 FR 3124, Jan. 17, 2020, unless otherwise noted.