CFC rules apply where more than 50 per cent of the total participation rights in that foreign company are directly or indirectly held, or more than 50 per cent of the voting rights in that foreign company are directly or indirectly exercisable, by one or more persons that are South African residents. The rules are partially relaxed in relation to voting rights in listed foreign companies.
CFC net income to be included in the South African resident's income is based on the ratio of the participation rights of that resident in relation to that CFC's total participation rights. 