If a foreign parent cororation with no US employees directly owns 100% of the stock 2 unrelated business with employees in the US, do the two US businesses constitute a controlled group of corporations?

Looks like the answer is yes they are controlled. I can't find any thing that would exempt them from the CG rules.

Yes, they seem to be a controlled group based on the information you presented. You may find some relief under the QSLOB rules (qualified separate lines of business). Best wishes.

We all agree--there's a controlled group. Aside from potential QSLOB relief, don't forget that non-resident aliens can be excluded from plan participation, which will remove from minimum coverage testing those who are non-US citiziens not living in the US but working for a member of the controlled group (in this case, the parent). A related--and often overlooked--issue is to make certain that any qualified Plan's trust is a domestic trust (see Reg. Section 1.401-1(a)(3) and Reg. Section 301.7701-7, especially -7(d)).

Thanks for the input. QSLOB doesn't help as one company doesn't have enough employees to qualify.