An Online International Law Initial Consultation Ex Gratia
 
 

What's the difference between foreign companies setting up branches and subsidiaries in China?

User Rating: 4 / 5

Star ActiveStar ActiveStar ActiveStar ActiveStar Inactive
 

The differences between the establishment of branches (分公司) and subsidiaries (子公司) by foreign enterprises in China are as follows:

1. Different business scopes:
The business scope of a branch company (分公司) should not exceed the business scope of the company, and the subsidiary company (子公司) does not have such restrictions.

2. Establishment process is different:
The requirements for the establishment of a subsidiary company (子公司) are roughly the same as those for the establishment of a general company.
If a branch company (分公司) company is established, it shall apply for registration with the competent authority in the place where the subsidiary company is located.

3. Different aspects of civil liability:
The civil liability of the branch company (分公司) shall be borne by the head office, while the subsidiary company (子公司) shall bear the civil liability independently.

4. Different annual examinations: A company establishing a subsidiary company (分公司) shall provide copies of its business license at the annual inspection, but a company establishing a subsidiary company (子公司) does not need to.

 

PRACTICE

  • Company registration in China
  • Representative office registration in China
  • Foreign investment in the banking sphere in China
  • Employment of foreigners in China