### Question
What does eligible controlled foreign corporation mean?


### Answer
**Eligible controlled foreign corporation** has the following meaning in *26 U.S.C. § 954*:

> a controlled foreign corporation which—


(i) is predominantly engaged in the active conduct of a banking, financing, or similar business, and


(ii) conducts substantial activity with respect to such business

#### Citation:
  - *26 U.S.C. § 954*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter N-Tax Based on Income From Sources Within or Without the United States > PART III-INCOME FROM SOURCES WITHOUT THE UNITED STATES > Subpart F-Controlled Foreign Corporations**

