Is the parent company responsible for the foreign debts of its subsidiaries?

The parent company generally does not need to bear the debts of its subsidiaries. Because the subsidiary is an independent legal person and bears civil liability independently, the parent company does not bear joint liability, so it does not need to bear foreign debt.

However, if the parent company's capital contribution is not in place or the parent-subsidiary company stipulates that the parent company shall bear joint and several liabilities for the debts of the subsidiary company, the parent company shall bear the foreign debts of the subsidiary company.

legal ground

Article 14 of the Company Law stipulates that a company may set up branches. 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.