AngelList will request a tax side letter from the foreign company ahead of the initial equity investment. The side letter confirms certain US tax treatment affecting the investment:
- The company is a corporation
- The company is not a Controlled Foreign Corporation (“CFC”)
- The company is not a Passive Foreign Investment Company (“PFIC”).
- If the company’s facts change, or they otherwise find out these statements are no longer valid, they will let us know.
These representations or their equivalents can also be provided from alternate sources in the investment documents.