If you’re considering the establishment of a company for the purpose of holding enough voting stock in another company to control management and policies, you’re going to have a holding company. In fact, this is the sole purpose of this structure – controlling another company. The purpose is not to produce its own services or goods.
While this may seem rather basic to those who know enough to begin planning and developing, it’s important to affirm the purpose. With expert guidance, you can establish a separate entity that will own assets such as patents, trademarks, stocks, and real estate. The primary benefit of having this specific structure is to protect the holding company from losses. If one of the owned subsidiaries goes bankrupt, the holding company does have a net worth decline and capital loss but creditors and debtors seek remuneration from the subsidiary or actual producer.
Holding: Somewhere Else
While this might be enough to convince you to establish your organisation where you are, you might also consider setting up a Swiss holding company. In fact, there might be benefits to setting up any type of company in another country, with two at the top of the list – untapped markets and government incentives. For a holding company, that second benefit might be the most important. For example, in Switzerland, certain government subdivisions or cantons can be quite attractive because of a low-level tax regime.
To get these and other benefits, it’s necessary to adhere to certain guidelines and regulations, including the level of revenues or investments. It may be difficult to know all the details of another nation and nearly impossible to keep up with the details of individual cantons or local agencies. You’d be wise to work closely with specialists who work in this area on a regular basis and can guide you to decisions that will be of the most benefit in your specific situation.
There are distinct advantages to setting up your company in Switzerland with specific tax exemptions being among the most attractive. When certain conditions are met, a holding company in this European nation can be exempt from cantonal tax in some locations. The company would also be subject to a reduced capital tax rate at a certain level. As your expert advisor would tell you, there can be exemptions to these privileges, yet another reason to work with someone bringing local, cantonal, and national knowledge to the table.
Before you decide to establish a holding company, seek expert advice about the array of activities that might be possible with this structure, other than holding shares. In addition, a specialist will be able to advise you about the deadlines and ending dates of special tax treatments that you are interested in. When establishing any type of business organisation, don’t do it alone.