When choosing a subsidiary, we can draw the following four conclusions: (1) Legal subject: the subsidiary is a legal person, and it bears legal liabilities independently in the project country, and does not affect the parent company and the headquarters (except those with responsibilities such as guarantee). The branch is not a legal person, and its legal obligations in the local country are ultimately borne by the headquarters. (2) Tax summary: Like local enterprises, subsidiaries will also enjoy preferential tax policies when fulfilling their tax obligations. When the parent company makes the final income tax declaration, it cannot summarize the gains or losses of its subsidiaries, and can provide indirect credit for the income tax paid by its subsidiaries when they pay dividends. As an independent enterprise, branches generally do not need to pay taxes in the host country. Profits and losses can be summarized to the headquarters for summary tax payment. Income tax paid by overseas branches in local countries can be paid in the head office. Business hours are short (no more than 6 months), which does not constitute a local permanent establishment and does not even pay income tax. (3) Business arrangement: As a local enterprise, the subsidiary can get more recognition from the local tax authorities in the business arrangement with the parent company, such as franchise fees, debts and labor services. Therefore, subsidiaries can have more methods and greater flexibility to transfer reasonable profits back to headquarters. (4) Exit mechanism: The headquarters can usually enjoy a more favorable capital gains tax rate for some overseas subsidiaries that resell shares, while the branches can't sell shares as a whole, but only belong to the branches to sell assets, which usually involves business tax and income tax, and the tax burden is very high. Subsidiaries and branches have many different regulations on taxation. Whether to set up a subsidiary or branch abroad should be considered from many aspects, such as preferential tax policies, company management system and enterprise development.

1. The branch is a subsidiary of the head office, and the branch is a branch or subsidiary directly engaged in the company's business. Legally speaking, the branch is not independent. Do not have the qualification of a legal person, can not independently enjoy civil rights and assume civil obligations; A branch company does not have its own company name and independent property, but its name and property are attached to the head office. Subsidiary is a concept corresponding to parent company. Although the subsidiary is controlled by the parent company, it is an independent enterprise legal person. Have their own name and property, independently enjoy civil rights and assume civil obligations.

2. According to the statistics of the Ministry of Commerce and the State Administration of Foreign Exchange, from10-June, China's total foreign direct investment was 2021.176 million yuan, up 3.4% year-on-year (equivalent to $7135 million, up1. Among them, domestic investors in China made non-financial direct investments in 4047 overseas enterprises in 160 countries and regions, with a cumulative investment of 348.83 billion yuan, down 3.7% year-on-year (equivalent to 53.9 billion US dollars, up 4.7% year-on-year).