GeoBusinessIQGeoBusinessIQ

Subsidiaries — Owning One Company With Another

A subsidiary is a separate company owned, wholly or partly, by another company. When a business expands into a new country, incorporating a local subsidiary is one of the two main options alongside a branch.

What it is

A subsidiary is its own legal entity with its own liability, accounts, and filings, controlled by a parent company that holds its shares.

Subsidiary vs branch

A subsidiary is a distinct company that generally limits the parent's liability to its investment; a branch is an extension of the parent itself. The choice affects liability, tax, and admin.

Why founders choose one

Local credibility, clearer liability separation, easier local banking and hiring, and the ability to take local investment often favour a subsidiary over a branch when expanding.

FAQ

Is a subsidiary liable for its parent's debts?
Generally a subsidiary is a separate entity with its own liability, though guarantees and specific facts can change that. Treatment varies by jurisdiction; this is informational only.
Does a subsidiary file its own accounts?
Usually yes — as a separate company it typically has its own accounting, tax, and filing obligations in its country of incorporation.

Related

Sources

  • OECD — OECD — economic and tax statistics (accessed ; reviewed )
    Covers: Comparable corporate tax, statutory rate, and economic indicators across member and partner economies.
    Does not cover: Effective tax rates, deductions and incentives, local surtaxes, and personal residency rules.
    Why it matters: Used as a cross-country baseline to sanity-check rates against primary tax-authority figures.
    Review cadence: Annual, plus on major statutory changes.
  • PricewaterhouseCoopers — PwC Worldwide Tax Summaries (accessed ; reviewed )
    Covers: Corporate income tax, VAT, and dividend withholding rates across most covered jurisdictions.
    Does not cover: Your specific effective rate, bespoke incentives, rulings, or transactions requiring professional advice.
    Why it matters: Used to triangulate rates against primary tax-authority sources, not as the sole authority.
    Review cadence: Updated by the publisher per tax year; re-checked each data review.
Informational overview only. This page is not legal, tax, accounting, or incorporation advice. Rules commonly vary by jurisdiction, residency, ownership, tax status, and business activity, and can change over time. Verify details with the official registry and a qualified advisor. See the methodology, disclaimer, and sources.

Last updated: