Filiale

A filiale is a subsidiary company controlled by a parent company. It is a separate legal entity from its owner, though the parent typically holds a controlling stake in its voting rights and exerts significant influence over strategic direction.

Etymology: The term originates from French and Italian usage, where filiale denotes a “child” or “daughter” company. The word ultimately derives from Latin filialis, meaning son or daughter.

Ownership and governance: The parent usually appoints a board or key directors and may influence senior management, while the filiale maintains its own internal governance, statutes, and local management. Although autonomously run, the subsidiary’s actions and finances are aligned with the parent’s objectives. Liability and contracts are those of the filiale, not of the parent.

Financial and regulatory aspects: The filiale keeps its own accounts and may have separate tax registrations and reporting obligations in the jurisdiction where it operates. For the corporate group, its financial results are typically consolidated with those of the parent. Cross-border filiales must comply with local corporate, tax, antitrust, and employment laws, as well as transfer pricing rules within the group.

Difference from a branch: A filiale has a separate legal personality, allowing it to own assets, sue, or be sued in its own name. A branch, by contrast, is usually an extension of the parent with no separate legal identity. The choice between a filiale and a branch depends on legal, tax, regulatory, and strategic considerations.

See also: subsidiary, corporate group.