(+84) 9 61 67 55 66
info@vietanlaw.vn

Identify parent company and subsidiary company in Vietnam

The identification of the parent company and subsidiary company is an important requirement to determine the entity that must prepare the consolidated financial statements in accordance with the accounting regulations. The following Law Viet An would like to give the grounds to identify the parent company, subsidiary companies for businesses to further information.

Identify parent company and subsidiary company in Vietnam

Pursuant to the Law on Enterprise 2020, a company is considered the parent company of another company if it falls into one of the following cases:

  • It holds more than 50% of charter capital or total ordinary shares of the latter;
  • It has the right to directly or indirectly designate most or all of the members of the Board of Directors and Director/General Director of the latter; or
  • It has the right to decide revisions to the latter’s charter.

In addition, Article 8 of Circular 202/2014/TT-BTC guiding the preparation and presentation of the consolidated financial statements also provides the grounds for determining the parent company by the right of control through domination of the financial statements. financial and operating policies so as to obtain benefits from the activities of this company, in particular:

The parent company has the right to govern the financial and operating policies in the following cases:

  • Holding more than 50% of direct or indirect voting rights in the Subsidiary. In case there is a difference between the percentage of voting rights according to the Enterprise Registration Certificate and the percentage of voting rights calculated on the basis of the actual contributed capital, the voting right shall be determined according to the charter of the enterprise or the agreement between the companies. beside;
  • Having the right to directly or indirectly appoint or remove the majority of the members of the Board of Directors, the Director or General Director of the subsidiary;
  • Having the right to cast a majority of votes at meetings of the Board of Directors or equivalent management level;
  • Having the right to decide on the amendment and supplementation of the charter of the subsidiary;
  • Other investors agreed to give the parent company more than 50% of the voting rights;
  • Has the power to govern the financial and operating policies by agreement.

If you have requested for more advice on issues related to the model of subsidiaries and parent company, please contact Viet An Law Firm for more specific and detailed advice on this issue.

Related Acticle

Child Support Non-Payment Lawsuit Procedures in Vietnam

Child Support Non-Payment Lawsuit Procedures in Vietnam

During divorce proceedings, the issue of child support is always considered a crucial matter to ensure the rights and interests of minor children. However, after a court judgment or decision…
Commune Chairs Issue Land Use Certificates in Vietnam from July 1, 2025

Commune Chairs Issue Land Use Certificates in Vietnam from July 1, 2025

On June 12, 2025, the Government issued Decree 151/2025/ND-CP regulating the decentralization of authority for local governments at two levels, empowering and decentralizing in the field of land. Accordingly, Commune…
Increased Fire Safety Fines from July 1, 2025 in Vietnam

Increased Fire Safety Fines from July 1, 2025 in Vietnam

Currently, violations of fire prevention and fighting regulations are becoming increasingly common with many complex behaviors, causing numerous unfortunate consequences and damages. To enhance deterrence and prevent fire safety violations,…
Border Area Import-Export Goods Supervision Licensing in Vietnam

Border Area Import-Export Goods Supervision Licensing in Vietnam

In the context of the increasingly strong development of import and export activities, especially in border areas, which play an important role as a gateway for trade between Vietnam and…
Blockchain Legal Consulting services in Vietnam

Blockchain Legal Consulting services in Vietnam

In the era of digital transformation, Blockchain technology is being widely applied globally, and Vietnam is no exception. However, along with this rapid development comes a series of legal challenges…

CONTACT VIET AN LAW

In Hanoi: (+84) 9 61 67 55 66
(Zalo, Viber, Whatsapp, Wechat)

WhatsApp Chat

whatsapp-1

In Hochiminh: (+84) 9 61 67 55 66
(Zalo, Viber, Whatsapp, Wechat)

WhatsApp Chat

whatsapp-1

ASSOCIATE MEMBERSHIP