The choice of location of a holding company is a strategic decision when thinking about structuring any international business, especially if the desire to minimise tax and to protect the assets held is key.
A holding company can be defined as a company established for the sole or majority purpose of holding shares in a group’s subsidiary companies incorporated in countries in which the group is engaged in business activities.
The holding company receives the dividends paid by those subsidiaries and uses them to declare a dividend to the ultimate parent.
Ideally, the jurisdiction chosen should fulfil certain criteria to render it an attractive place to form a holding company, including the following:
- Recognised stable legal system
- Double tax treaty network, thereby minimising withholding taxes on dividends received
- Dividend income exempt from taxation
- No capital gains tax on the disposal of subsidiaries
- No withholding taxes on distributions from the holding company to its parent or shareholders
- No capital gains tax on profits arising from the sale of shares in the holding company by non resident shareholders
- No capital duties on share capital
- No minimum paid up share capital
- No restrictions on the movement of capital
Prior to setting up a new holding company for you we will, amongst others:
- Assess your current business situation and future corporate goal
- Advise you on the best structure available to you
- Incorporate & administer your new company
- Perform a full range of corporate management services
- Manage the company bank account opening procedure on your behalf
- Put in place a representative office
- Provide sound accounting and VAT services
- Offer asset protection advice