What are the conditions to become a parent company?

Pursuant to Article 189 of the 2014 Enterprise Law, the parent company and subsidiary are defined as follows:

- A company is considered a parent company of another company if it falls into one of the following cases:

+ Holds more than 50% of charter capital or total ordinary shares of that company;

+ Has the right to directly or indirectly decide the appointment of the majority or all members of the Board of Directors, the Director, or the General Director of that company;

+ Has the right to decide on the amendment and supplementation of the charter of that company.

- A subsidiary company is not allowed to invest in or purchase shares of its parent company. Subsidiaries of the same parent company are not allowed to jointly invest in or purchase shares to cross-own each other.

- Subsidiaries with the same parent company which is an enterprise with at least 65% state capital ownership are not allowed to jointly contribute capital to establish an enterprise as regulated by this Law.

- The Government of Vietnam provides detailed regulations for clauses 2 and 3 of this Article.

=> Therefore, based on the information you provided, you currently have two separate joint-stock companies, temporarily referred to as company A and company B. Accordingly, if company A holds more than 50% of the charter capital or total ordinary shares of company B, then your company A will become the parent company, and company B will become the subsidiary.

Respectfully!