There are general rules and reasons for establishing a holding company, with each location around the globe establishing different guidelines and offering different benefits. But in general terms, a holding company is organised for the purpose of obtaining equity ownership in and managing participation in other companies.
It’s also a general guideline of a holding company that this entity doesn’t develop or market services or products. In the specific situation of a holding company organised under tax law in Switzerland, the company will not conduct other business activity in that country. To start towards the establishment of a Swiss holding company, you’d be wise to understand why this country is such a good location for establishing this specific corporate structure.
Location, World-Class Stature
Not only is it a wealthy country with beautiful landscape and a relatively small population but it also offers a tax regime that’s attractive for both personal and corporate reasons. Switzerland is the epitome of a world-class financial centre, giving companies established there a sterling reputation and global stature. The country also rates highly in very practical terms with corporate tax rates among the lowest anywhere.
For example, the rate on a privileged holding company is 7.8% while the tax rate on a privileged mix company ranges from 4% to 11%. Comparable rates in a dozen other nations around the globe range from 12.55% to 35%. Narrow your search even more to specific Cantonal benefits and you’ll find that the Canton of Zug has a remarkably favourable tax regime. This makes it the choice of many multinational corporations that want to establish an entity in Switzerland. Personal tax rates are also quite low.
A holding company has as its main purposes: shareholdings in other companies, holding of intellectual property, holding of subsidiaries, and asset protection. With the assistance of experienced professionals, you have access to fiduciary services and company formation as well as administration, accounting, operational, and taxation services.
Significant Benefits
Some of the benefits of establishing a holding company are exemption or reduction of dividend income tax when qualified and exemption or reduction of capital gains corporate tax from qualified sales. Benefits also include deductible borrowing costs (accrued or paid) as well as withholding tax exemption in certain cases. There are also attractive benefits when you establish a mixed company or business control centre company. These benefits apply to companies established to manage business operations internationally as well as to hold corporate assets and/or intellectual property. Tax benefits for this structure are also significant.
Learn more about how to properly establish your company in Switzerland when you visit the website of one of the leading specialists in this field. You’ll also have access to assistance with establishing a company to fund international operations or to provide services and management to entities outside of Switzerland.
