Empact Launches Industry's First Complete FEOC Compliance Solution to Meet OBBBA Requirements for Clean Energy Tax Credits
Empact Technologies announced the launch of its Foreign Entity of Concern (FEOC) compliance solution, the first complete offering in the market to address all three FEOC tests required under the One Big Beautiful Bill Act (OBBBA): Ownership, Effective Control, and the Material Assistance Cost Ratio (MACR).
The solution is powered by NexusIQ, Empact's proprietary AI-native platform, which automates supplier data collection, entity analysis, and documentation across all three FEOC tests, delivering audit-ready documentation for developers, tax equity investors, lenders, and tax counsel looking to complete due diligence and close on financing. NexusIQ unifies all labor and supply chain compliance in a single platform, helping developers manage Prevailing Wage & Apprenticeship (PWA), Beginning of Construction (BOC), Domestic Content, FEOC, and other regulatory requirements through a common framework of automated compliance intelligence, centralized evidence management, and expert-guided workflows.
FEOC represents the most onerous new requirement introduced under the OBBBA, establishing a three-test framework that all clean energy projects beginning construction in 2026 must satisfy:
- Ownership: The tax credit seller and tax credit buyer must not be owned 25% or more, directly or indirectly, by a government or entity from China, Russia, North Korea, or Iran.
- Effective Control: The project must not make payments to a specified foreign entity under a contract, license, or arrangement that grants control over production, operations, sourcing, or intellectual property.
- MACR: Key components and critical minerals must not exceed a defined cost ratio sourced from FEOC-linked suppliers, with certifications executed under penalties of perjury.
Many clean energy developers assume that projects which established BOC before 2026 are not subject to any FEOC requirements. For projects that established BOC before the July 2025 enactment of the OBBBA, that is largely true. However, projects that began construction after the enactment of the OBBBA (July to December 2025) may need to meet ownership and effective control tests.
Projects that have not assembled defensible FEOC records remain at risk of losing their tax credits in full. Under the OBBBA, failure in any one of these tests will result in the complete loss of tax credits, an unprecedented consequence relative to earlier IRA compliance requirements.
"We're proud to bring this solution to market at exactly the moment developers need it most," said Charles Dauber, Founder and Chief Executive Officer of Empact Technologies. "We're hearing from clients about deals frozen by a lack of compliance and challenges in due diligence. NexusIQ gives them the documentation to protect the tax credits they have worked to earn, and the foundation to close on tax equity and other financing with confidence."
NexusIQ covers FEOC compliance across the full project lifecycle, analyzing ownership structures, debt, effective control, and MACR. The resulting FEOC reports are structured for law firm collaboration and designed to reduce diligence cycles for lenders and tax equity investors. The platform's methodology updates continuously as IRS guidance and supplier disclosures evolve.
Empact's AI-native NexusIQ platform and dedicated compliance services team deliver the technology and expert guidance clients need to manage FEOC compliance from initial financing through the full tax credit lifecycle.
To see NexusIQ in action, register for our demo on June 17 at empacttechnologies.com/feoc-demo.
Empact Technologies | empacttechnologies.com
