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IRS defines a Controlled Foreign Corporation in terms of U.S. shareholders and voting power (Ctrl + F to CFC. In general), with some wiggle room.

Suppose I'm an independent contractor working from abroad for a US-based company, who has set up an LLC in that country (so no stocks). I'm a US citizen that's a tax resident of the abroad nation. Can I (or my LLC) be considered a CFC?

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Can I (or my LLC) be considered a CFC

It depends how it is treated under the local law. If under the local law it is treated as a Corporation would be treated in the US - then yes. If it is treated as a disregarded entity (similarly to LLCs in the US) then you can treat it as disregarded on your US tax return.

You'll need to work with tax adviser(s) who's familiar with both the local and the US tax laws.

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  • One note though given your previous question: if it is disregarded then you are not considered employee, and you won't be able to avoid the SE tax. If it is not disregarded - you'll have to deal with CFCs and local corporate and payroll taxes.
    – littleadv
    Dec 2, 2022 at 1:00

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