A Swiss Holding Company is simply an organisation that focuses on long-term goals through financial investments in companies associated with it. One of the main benefits of a Swiss Holding Company is that it doesn’t have to undertake any business in Switzerland. There are several positive aspects that come into play when creating a holding company in Switzerland, but in order to take advantage of those benefits, you must meet several strict guidelines.
The Tax Advantages
Most people choose to have Swiss holding companies because of the numerous tax advantages. For example, in Switzerland, the income tax rate for corporations on the federal level is firmly placed at 8.5%, which is pretty small compared to the tax rate in other companies. That rate can even be reduced to 7.8% if certain requirements are met.
Another advantage that comes with these companies is the privileges for dividends. Thanks to double tax treaties that are signed by Switzerland and several other territories, many owners of these companies receive tax privileges for any dividends acquired along with subsidiaries of a Swiss Holding Company. These dividends have the right to federal tax reductions based on the dividend income in relation to the net income.
The Cantonal Taxation
When choosing to create a Swiss Holding Company, you need to decide where the company will be created. There are several cantons within Switzerland to choose from. It’s important to note that different cantons have different levels of taxation. Businesses are taxed based on the income that they make on a global scale. Taxes range from as low to 4% to as high as 25%. If your holding company meets certain preconditions, its income tax is not imposed by the canton, only on the federal level.
One of the most common cantons to make a Holding Company in is Zug. This popular canton has a low tax status, excellent location, and a climate that is particularly friendly towards businesses. For every four holding companies that exist in Switzerland, one of them is located in Zug.
Important Things to Remember
Many business owners believe that it is a great idea to make a Swiss Holding Company, and while it does have its advantages, it is not easy to set one up. If you’re looking to make a holding company in Switzerland, make sure that you know what you’re getting into.
For example, while having a holding company does give you quite a few benefits, you aren’t allowed to do any commercial business in Switzerland. Businesses are allowed to participate in certain things, such as asset management, foreign business activities, and group management functions.
It is important to seek the advice of a professional before going forward with creating a holding company in Switzerland.
Company Creation Services
It’s no easy feat to create a holding company. In fact, there are many requirements, rules, and a great deal of paperwork that is involved before you’re able to officially create your Swiss Holding Company.
However, there are services that are specifically designed to help ensure that any attempts to establish a holding company go through without a problem. If you’re trying to have your holding company created in Switzerland as quickly as possible, reach out to these services, and see how they can help you.
