Committee on Foreign Investment in the United States - CFIUS

DEFINITION of 'Committee on Foreign Investment in the United States - CFIUS'

An inter-agency committee of the United States government that reviews financial transactions to determine if they will result in a foreign person controlling a U.S. business. CFIUS specifically focuses on transactions where foreign control will result in a threat to national security.  It is chaired by the U.S. Treasury Department, and draws members from notable agencies such as the Department of State and Department of Defense.

CFIUS has its roots in the Defense Production Act of 1950, but became more active after President Gerald Ford signed Executive Order 11858 in 1975.

BREAKING DOWN 'Committee on Foreign Investment in the United States - CFIUS'

The U.S. government considers several industries as vital to the nation’s security, including many relating to defense technologies and advanced computing. CFIUS is used to review acquisitions of American firms to determine if a foreign country can negatively impact the ability of the nation to defend itself.

While foreign companies interested in purchasing a U.S.-based firm are not required to submit plans to CFIUS, the committee can review any transaction regardless of submission. CFIUS is required to investigate any potential merger or acquisition in which the firm seeking to take over is acting on behalf of a foreign government, especially if the U.S. firm operates in a sensitive industry.

The agencies involved in CFIUS have changed over time, following legislative adjustments. The President of the United States is the only CFIUS officer with the ability to suspend transactions, and can order foreign companies to divest holdings in U.S. companies. 

RELATED TERMS
  1. Exon-Florio Provision

    A provision that allows the president of the United States to ...
  2. Foreign Investment

    Flows of capital from one nation to another in exchange for significant ...
  3. Section 988

    A financial transaction involving a capital loss or gain on an ...
  4. Foreign Tax Credit

    A non-refundable tax credit for income taxes paid to a foreign ...
  5. Foreign Bond

    A bond that is issued in a domestic market by a foreign entity, ...
  6. Foreign Earned Income Exclusion

    The amount of income earned from a foreign source that is excludable ...
Related Articles
  1. Investing News

    Chinese Insurance Giant Snapping Up U.S. Companies (BX, FGL)

    The U.S. insurer Fidelity & Guaranty Life announced Tuesday that the Committee on Foreign Investment in the United States (CFIUS) has approved its $1.57 takeover by Anbang Insurance Group, continuing ...
  2. Savings

    Should You Open A Foreign Savings Account?

    Would opening a savings account in a foreign bank make sense for you? The pros and cons, how to establish one – and alternatives to consider.
  3. Investing Basics

    Explaining Foreign Exchange Risk

    Foreign exchange risk is the chance that an investment’s value will decrease due to changes in currency exchange rates.
  4. Taxes

    Tax Implications of Opening a Foreign Bank Account

    Learn about the tax implications of opening a foreign bank account, including accounts that generate earned or unearned income from overseas activity.
  5. Taxes

    6 Tax Forms for Investors Who Have Money Abroad

    If you're a U.S. citizen or resident, and you own assets in other countries, you might need to file these six forms with the government.
  6. Investing Basics

    Here's How To Tap International Markets (PBR, VALE)

    Access to foreign markets has grown a lot in recent years, allowing US market players to trade these bourses in real-time.
  7. Investing Basics

    Broadening Your Portfolio's Borders

    Find out what type of international fund might suit your needs in gaining exposure to foreign markets.
  8. Mutual Funds & ETFs

    Playing It Safe In Foreign Stock Markets

    Find out some of the lower-risk ways to invest in foreign markets.
  9. Taxes

    Understanding Taxation Of Foreign Investments

    Technically, any gains from foreign investments owned by an American citizen are subject to tax by the company's home country as well as the IRS. However, the Foreign Tax Credit enables you to ...
  10. Retirement

    What Taxes Do I Owe On Retirement Accounts Abroad?

    If you're a U.S. retiree, but previously worked abroad, here's what you need to know about taxes on foreign pensions and retirement accounts.
RELATED FAQS
  1. How can I trade in foreign futures?

    Discover how an American investor can get started in trading foreign futures, including which regulations and restrictions ... Read Answer >>
  2. What are some examples of a Foreign Institutional Investor (FII)?

    Discover some examples of foreign institutional investors, and learn information about the nature of foreign institutional ... Read Answer >>
  3. How do businesses decide whether to do FDI via green field investments or acquisitions?

    When businesses decide to expand their operations to another country, one of the more important dilemmas they can face is ... Read Answer >>
  4. How can I invest in a foreign exchange market?

    The foreign exchange market, also called the currency market or forex (FX), is the world's largest financial market, accounting ... Read Answer >>
  5. What nations are actively recruiting FDI (foreign direct investments)?

    Understand the concept of foreign direct investments, and learn which countries most enthusiastically pursue investments ... Read Answer >>
  6. I live in the U.S. How can I trade stocks in China and India?

    Foreign markets have always been an object of envy to domestic investors because the indexes in some foreign countries have ... Read Answer >>
Hot Definitions
  1. Physical Capital

    Physical capital is one of the three main factors of production in economic theory. It consists of manmade goods that assist ...
  2. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  3. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  4. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  5. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  6. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
Trading Center