Corporate Groups, Parent companies and Subsidiary companies in Vietnam

Attorneys in Danang, Vietnam advise about corporate groups, parent companies and subsidiary companies in Vietnam ?

Corporate Groups

An economic group or corporation in any economic sector means a group of companies having relations with each other through ownership of shares, shares of capital contribution or other association. Economic group or corporation is not a form of enterprise, does not have legal entity status, and is not required to be registered for establishment in accordance with this Law. An economic group or corporation shall have a parent company, subsidiary companies and other member companies. The parent company, subsidiary companies and each member company in an economic group or corporation shall have the same rights and obligations as applicable to independent enterprises in accordance with law (Article 188, Law on Enterprises No. 68/2014/QH13 dated 11/26/2014.).

Parent companies and subsidiary companies

A company shall be deemed to be the parent company of another company if it falls into one of the following cases:

It owns more than fifty (50) per cent of the charter capital or the total number of ordinary shares of such another company;

It has the right to directly or indirectly make decisions on appointment of the majority or all members of the Board of Management, the director or general director of such company;

It has the right to make decisions on amendment of and addition to the charter of such company.

Subsidiary companies are not permitted to invest in contribution of capital to or purchase of shares of the parent company. Subsidiary companies of the same parent company are not permitted to jointly contribute capital or purchase shares in order to have mutual cross ownership.

Subsidiary companies having the same parent company which is an enterprise with ownership of at least sixty five (65) per cent of State capital are not permitted to jointly contribute capital to establish an enterprise in accordance with this Law.

The Government shall provide detailed regulations on Clauses 2 and 3 of this Article (Article 189, Law on Enterprises No. 68/2014/QH13 dated 11/26/2014.)./.

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Lawyer Do Minh Son