Tochtergesellschaft (subsidiary)
A Tochtergesellschaft is a subsidiary - a legally independent company controlled by a parent company (the Muttergesellschaft), typically through majority ownership of its shares.
Unlike a branch, a subsidiary is its own legal entity with its own liability. This is the structure most German companies use to operate in the United States: the German parent (e.g. a GmbH or AG) owns a US subsidiary - usually a US LLC or corporation - which employs US staff, signs US contracts, and files US taxes, while liability is contained within the US entity.
Most listings on this directory that belong to large German brands are exactly this: US subsidiaries of German parent companies.
See also: Niederlassung (branch office), GmbH
Frequently asked questions
- Is a US subsidiary of a German company "German"?
- For this directory, yes - a US subsidiary or branch of a German company qualifies as a German business. It is a US legal entity, but it is German-owned and operated, which is exactly the connection the directory lists.
- How is a subsidiary different from a branch?
- A subsidiary is a separate legal entity with its own liability and tax status; a branch is part of the parent and leaves the parent directly liable. Subsidiaries are the usual choice for entering the US market.