Legal Guide: Overseas Subsidiary Management & Compliance
Oct 06, 2025
Subsidiary governance and compliance are vital in global business. This FAQ gives quick legal answers. We cover first steps, documents, and pitfalls in simple terms.
Overseas Subsidiary Legal FAQ
Q1. What is subsidiary legal management?
A. It means the parent oversees risks in its foreign units. It covers law, finance, controls, and data. This ensures directors meet duties and match local rules.
Q2. What systems must come first?
A. Set up these seven items:
- Written rules for authority and control
- Pre-approval flow for big issues
- Clear criteria for key roles
- Fund and accounting rules
- Audit and internal audit plans
- Incident report and escalation flow
- Anti-bribery and export policies
Q3. How to act in fraud or accident cases?
A. Use five steps: (1) Save evidence → (2) Form team → (3) Gather facts → (4) Assess → (5) Plan. Keep records safe. Avoid conflicts. Interview staff. Call experts if needed. Check duty to report. Decide how to disclose.
Q4. How much should the Board supervise?
A. Focus on risk, not daily work. Check if systems are sound. Review reports. Track KPIs. Approve key deals. Use audit feedback.
Q5. How to handle bribery and sanctions?
A. Follow both local and global laws. Apply FCPA and UKBA. Screen partners. Set gift limits. Run training and keep logs.
Q6. How to manage local partners?
A. Start with risk checks. Do due diligence. Contracts must set duties, conflicts, audits, and exit rules. Secure reporting lines and audit rights.
Q7. How do law and tax connect?
A. Keep related deals fair. Write transfer pricing rules. Follow payout laws. Meet BEPS rules. Join up law, tax, and audit teams.
Q8. What to fix first after M&A?
A. In the 100-day plan: (1) unify rules, (2) close compliance gaps, (3) review contracts, (4) set cash rules, (5) align staff and teams.
Q9. What records should be kept?
A. Keep proof of governance and control:
| Type | Documents | Use |
|---|---|---|
| Rules | Subsidiary rules, authority, minutes | Show clear control |
| Compliance | Policy, training logs, DD results | Show legal proof |
| Audits | Plans, reports, fix records | Show oversight |
| Incidents | Approvals, regulator logs | Show valid response |
Q10. When to seek legal help?
A. Call when fraud signs appear. Or when regulators ask, a JV deal is near, or after M&A. We help with rules, contracts, training, crisis, and PMI.
You are welcome to contact us via the Contact Form to discuss and for more information.
Attorney’s Note
Sanction lists change often. Check them often, not only at deal start.