The main provisions and rules for taxation of controlled foreign companies are determined by Article 39-2 of the Tax Code of Ukraine (hereinafter referred to as the Code). Controlled foreign company (hereinafter referred to as the CFC) is any legal entity registered in a foreign state or territory that is recognized as being under the control of an individual resident of Ukraine or a legal entity resident of Ukraine in accordance with the rules specified by the Code. A foreign entity without the status of a legal entity may be equated to a controlled foreign company. A foreign company is recognized as a CFC if the controlling person: - owns a stake in a foreign legal entity in the amount of more than 50 percent, or - owns a stake in a foreign legal entity in the amount of more than 10 percent, provided that several individuals - residents of Ukraine and/or legal entities - residents of Ukraine own stakes in a foreign legal entity, the size of which in aggregate is 50 percent or more, or - individually or together with other residents of Ukraine - related persons exercise actual control over a foreign legal entity. At the same time, the Code determines that CFCs also include companies with indirect ownership and provides for options for various corporate structures with shares of ownership of CFCs through one or more chains (clause 39-2.1 of the Tax Code).