Transitional foreign‑held subsidiaries and transitional foreign‑held indirect subsidiaries
701C-20 Transitional foreign‑held subsidiaries and transitional foreign‑held indirect subsidiaries
If:
an entity is a subsidiary member of a consolidated group in a case where the set of requirements described in section 701C‑10 are met; and
one or more of the membership interests in the entity are held by:
a non‑resident company; or
a non‑resident trust; or
an entity that holds the membership interests only as a nominee of one or more entities each of which is a non‑resident company or a non‑resident trust; or
a partnership, each of the partners in which is a non‑resident company or a non‑resident trust;
then:
the entity is a transitional foreign‑held subsidiary of the group; and
if:
the transitional foreign‑held subsidiary; or
an entity that is a transitional foreign‑held indirect subsidiary of the group because of another application of this paragraph;
holds one or more membership interests in another entity that:
is a subsidiary member of the group; and
is not a transitional foreign‑held subsidiary of the group;
that other member is a transitional foreign‑held indirect subsidiary of the group.
In order to be a subsidiary member of the group as required by subparagraph (d)(iii), the transitional foreign‑held indirect subsidiary would need to have satisfied the set of requirements in either section 701C‑10 or 701C‑15
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