We study here the problem of Antenna Domain Formation (ADF) in cloud RAN systems, whereby multiple remote radio-heads (RRHs) are each to be assigned to a set of antenna domains (ADs), such that the total interference between the ADs is minimized. We formulate the corresponding optimization problem, by introducing the concept of \emph{interference coupling coefficients} among pairs of radio-heads. We then propose a low-overhead algorithm that allows the problem to be solved in a distributed fashion, among the aggregation nodes (ANs), and establish basic convergence results. Moreover, we also propose a simple relaxation to the problem, thus enabling us to characterize its maximum performance. We follow a layered coordination structure: after the ADs are formed, radio-heads are clustered to perform coordinated beamforming using the well known Weighted-MMSE algorithm. Finally, our simulations show that using the proposed ADF mechanism would significantly increase the sum-rate of the system (with respect to random assignment of radio-heads).