Question 1

What ownership percentage is required for SDVOSB status?

Accepted Answer

At least 51% of the business must be unconditionally owned by one or more service-disabled veterans. Ownership must be direct — ownership through an intervening entity generally does not count unless each layer of the structure is also more than 50% owned by service-disabled veterans. The 51% threshold applies to all economic interests including profits, losses, and liquidation rights.

Question 2

What control requirements must an SDVOSB meet?

Accepted Answer

The service-disabled veteran(s) must control the management and daily business operations of the firm. Control means the veteran must hold the highest officer position (e.g., CEO, President, or Managing Member), manage day-to-day operations, and possess the requisite managerial experience to run the business. The veteran cannot be a mere figurehead — non-veterans cannot run daily operations even if the veteran is the majority owner.

Question 3

Can a foreign national or foreign entity own a stake in an SDVOSB?

Accepted Answer

Service-disabled veteran owners must be U.S. citizens, but non-veteran minority owners can include non-citizens or foreign entities as long as they collectively hold less than 49% and have no control. However, many SDVOSB contracts involve classified work or controlled technology — such contracts typically require that all key personnel and significant owners be U.S. citizens or cleared nationals. Foreign ownership can also trigger FOCI (Foreign Ownership, Control, or Influence) reviews.

Question 4

Can an SDVOSB be owned through a trust?

Accepted Answer

Ownership through a revocable living trust may qualify if the service-disabled veteran is the sole beneficiary and retains full control of the trust. Irrevocable trusts or trusts with non-veteran beneficiaries typically will not qualify. SBA examines the economic substance of the ownership structure, not just the legal form. Any trust arrangement should be reviewed carefully before certifying.

What ownership percentage is required for SDVOSB status?

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