The difference between a wholly-owned subsidiary and a branch

Legal analysis: A subsidiary has an independent legal person status in law, and can bear legal responsibility for its foreign production and business activities with its own independent property. However, the branch company does not have independent legal personality, and its foreign production and business activities and civil liabilities shall be borne by the head office.

Legal basis: Branch companies can be established in Article 14 of People's Republic of China (PRC) Company Law. The establishment of a branch company shall apply to the company registration authority for registration and obtain a business license. A branch company does not have legal person status, and its civil liability shall be borne by the company. A company may set up subsidiaries, which have legal personality and independently bear civil liabilities according to law.