What are the Benefits of Registering a Subsidiary Company?

Setting up a subsidiary company

By Kooshila Takoordyal, 17.11.2020

Setting up a subsidiary under your current company (or parent company) could be a great choice for your business. A subsidiary company has the freedom of being an independent company that can engage in new business opportunities while reducing risk to the parent company.

What is a Subsidiary Company?

A subsidiary company may be partially owned or entirely owned by another company, it is exactly another company, so it must be incorporated as one. A subsidiary is an independent legal entity, which implies they are usually formed either as a corporation or as a limited liability company. The parent corporation or limited liability company regulates the new company by being its majority shareholder and maintaining the full right to employ the subsidiary’s board of directors.

Setting up a subsidiary company is one of the more popular options for expanding a business abroad, however, a business should explore all option to ensure it is the best decision. You can reach more about the various Company Structures here.

What are the benefits?

Registering a subsidiary company can have many benefits for your business. Entering a new location can mean improved revenue and business expansion that would not be possible in the home country. Here are some of the useful advantages of registering a subsidiary company:

  1. Access to new markets for products and service
  2. Brand Recognition Expansion
  3. Use of free trade
  4. Tax advantages
  5. Risk Diversification
  6. Access to advanced technology and Regional knowledge, skilled workforce
  7. More cost-effective manufacturing and production
  8. Part of a global business expansion and Investment Plan

Subsidiary company registration is a popular and effective way to optimise your company’s profitability. Subsequently, the start-up process for a subsidiary is the same as forming a new company, namely drafting and filing the appropriate formation documents with the country. Setting up a subsidiary company isn’t a decision that you should take lightly as it is essential your subsidiary is structured correctly. Here at Euro Company Formations, we can help you with registering a subsidiary company that will suit your business needs.

For more information on setting up a subsidiary company please don’t hesitate to Contact Us. The experts at Euro Company Formations would be happy to assist you with the requirements in over 50 European jurisdictions.

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