28 C.F.R. § 202.228 – Investment agreement.

(a) Definition. The term investment agreement means an agreement or arrangement in which any person, in exchange for payment or other consideration, obtains direct or indirect ownership interests in or rights in relation to:
1. (1) Real estate located in the United States; or
2. (2) A U.S. legal entity.
(b) Exclusion for passive investments. The term investment agreement excludes any investment that:
1. (1) Is made:
  1. (i) Into a publicly traded security, with “security” defined in section 3(a)(10) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)), denominated in any currency that trades on a securities exchange or through the method of trading that is commonly referred to as “over-the-counter,” in any jurisdiction;
  2. (ii) Into a security offered by:
    1. (A) Any “investment company” (as defined in section 3(a)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(a)(1)) that is registered with the United States Securities and Exchange Commission, such as index funds, mutual funds, or exchange traded funds; or
    2. (B) Any company that has elected to be regulated or is regulated as a business development company pursuant to section 54(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-53), or any derivative of either of the foregoing; or
  3. (iii) As a limited partner into a venture capital fund, private equity fund, fund of funds, or other pooled investment fund, or private entity, if the limited partner's contribution is solely capital and the limited partner cannot make managerial decisions, is not responsible for any debts beyond its investment, and does not have the formal or informal ability to influence or participate in the fund's or a U.S. person's decision making or operations;
2. (2) Gives the covered person less than 10% in total voting and equity interest in a U.S. person; and
3. (3) Does not give a covered person rights beyond those reasonably considered to be standard minority shareholder protections, including (a) membership or observer rights on, or the right to nominate an individual to a position on, the board of directors or an equivalent governing body of the U.S. person, or (b) any other involvement, beyond the voting of shares, in substantive business decisions, management, or strategy of the U.S. person.
(c) Examples—(1) Example 1. A U.S. company intends to build a data center located in a U.S. territory. The data center will store bulk personal health data on U.S. persons. A foreign private equity fund located in a country of concern agrees to provide capital for the construction of the data center in exchange for acquiring a majority ownership stake in the data center. The agreement that gives the private equity fund a stake in the data center is an investment agreement. The investment agreement is a restricted transaction.
(2) Example 2. A foreign technology company that is subject to the jurisdiction of a country of concern and that the Attorney General has designated as a covered person enters into a shareholders' agreement with a U.S. business that develops mobile games and social media apps, acquiring a minority equity stake in the U.S. business. The shareholders' agreement is an investment agreement. These games and apps developed by the U.S. business systematically collect bulk U.S. sensitive personal data of its U.S. users. The investment agreement explicitly gives the foreign technology company the ability to access this data and is therefore a restricted transaction.
(3) Example 3. Same as Example 2, but the investment agreement either does not explicitly give the foreign technology company the right to access the data or explicitly forbids that access. The investment agreement nonetheless provides the foreign technology company with the sufficient ownership interest, rights, or other involvement in substantive business decisions, management, or strategy such that the investment does not constitute a passive investment. Because it is not a passive investment, the ownership interest, rights, or other involvement in substantive business decisions, management, or strategy gives the foreign technology company the ability to obtain logical or physical access, regardless of how the agreement formally distributes those rights. The investment agreement therefore involves access to bulk U.S. sensitive personal data. The investment agreement is a restricted transaction.
(4) Example 4. Same as Example 3, but the U.S. business does not maintain or have access to any government-related data or bulk U.S. sensitive personal data (e.g., a pre-commercial company or startup company). Because the data transaction cannot involve access to any government-related data or bulk U.S. sensitive personal data, this investment agreement does not meet the definition of a covered data transaction and is not a restricted transaction.