---
kind: "section"
citation: "31 C.F.R. § 800.244"
title: "31"
number: "800.244"
heading: "Substantial interest."
url: "https://uscodex.org/cfr/31/800.244"
---

# §800.244. Substantial interest.

- (a) The term substantial interest means, in the context of an acquisition of an interest in a U.S. business by a foreign person, a voting interest, direct or indirect, of 25 percent or more, and, in the context of a foreign person in which the national or subnational governments of a single foreign state have an interest, subject to [paragraph (b)](#b) of this section, a voting interest, direct or indirect, of 49 percent or more.
- (b) In the case of an entity whose activities are primarily directed, controlled, or coordinated by or on behalf of a general partner, managing member, or equivalent, the national or subnational governments of a single foreign state will be considered to have a substantial interest in such entity only if they hold 49 percent or more of the interest in the general partner, managing member, or equivalent of the entity.
- (c) For purposes of determining the percentage of interest held indirectly by one entity in another entity under this section, any interest of a parent will be deemed to be a 100 percent interest in any entity of which it is a parent.
- (d) **Examples—**
  - (1) **Example 1.** Corporation A, a foreign person, plans to acquire a 30 percent voting interest in Corporation X, an unaffiliated TID U.S. business. Corporation B holds 51 percent of the voting interest in, and is a parent of, Corporation A. A foreign government holds 75 percent of the voting interest in Corporation B, and private, non-government controlled individuals hold the remaining 25 percent. Under [paragraph (c)](#c) of this section, Corporation B is deemed to have 100 percent of the voting interest in Corporation A because it is Corporation A's parent, and therefore the foreign government's indirect voting interest in Corporation A is imputed to be 75 percent. Corporation A is acquiring a substantial interest in Corporation X, and a foreign government has a substantial interest in Corporation A.
  - (2) **Example 2.** Same facts as the example in [paragraph (d)(1)](#d-1) of this section, except that Corporation B holds only 49 percent of the voting interest in Corporation A and is not Corporation A's parent. Because Corporation B is not a parent of Corporation A, [paragraph (c)](#c) of this section is not applicable. The foreign government's indirect voting interest in Corporation A for purposes of this section is only 36.75 percent. Corporation A is acquiring a substantial interest in Corporation X; however, the foreign government does not have a substantial interest in Corporation A.

## Notes

### Amendments

[85 FR 3124, Jan. 17, 2020, as amended at 85 FR 57128, Sept. 15, 2020]

### 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.

### Amendments

[85 FR 3124, Jan. 17, 2020, as amended at 85 FR 57128, Sept. 15, 2020]