I presume you mean "controlled foreign corporation" regulations.
Many different countries have their own CFC regulations including Australia, the USA, etc.
These laws essentially create a situation where the company needs to abide by the rules of multiple jurisdictions, and not just the one of incorporation.
These regulations often stipulate that the "offshore" corporation may be taxed under certain situations (for Americans, an example of this would be Subpart F income)
I.e. If an American sets up a company in Great Britain (or China, or Uzbekistan) and owns 100% of the shares, this would be classified by the IRS as a CFC.
For Americans CFC regulations come into play when over 50% interest in a foreign corporation is owned by American taxpayers.
If, however, you have over 10% interest in a foreign corporation, you should get proper tax advise and file form 5471 - Information Return of U.S. Persons With Respect to Certain Foreign Corporations.
Other forms Americans may need to file include TDF 90-22.1 and form 8938.
This above answer is a very broad overview, based on my own research and experience owning CFC's, it is not tax advise, and should not be used to avoid taxes.
Answered 9 years ago