Introduction
A holding company is a business entity established primarily to own shares in other companies. Unlike operating companies, which are involved in day-to-day business activities such as sales, manufacturing, or service delivery, holding companies exist to manage assets, control subsidiaries, and streamline ownership structures. They are an essential tool for business owners and investors looking to optimise their operations, protect assets, and plan for long-term growth.
Why Create a Holding Company?
Holding companies offer several advantages, such as:
- Asset Protection
By separating assets from operational risks, a holding company can shield its assets from potential liabilities of its subsidiaries. - Tax Efficiency
Many jurisdictions offer tax incentives for holding companies, including exemptions on dividends, capital gains, and foreign-sourced income. - Simplified Management
A holding company can centralise decision-making and oversight, making it easier to manage multiple subsidiaries under one umbrella. - Succession Planning
Holding companies simplify the transfer of ownership and assets, making them an attractive vehicle for long-term business planning.
Popular Jurisdictions for Holding Companies
The choice of jurisdiction is critical to the success of a holding company, with different regions offering unique benefits. Here are some of the most popular options:
- United Arab Emirates (UAE)
The UAE is rapidly becoming a hub for holding companies due to its tax-friendly policies, zero corporate tax for non-oil businesses, and strategic location connecting Europe, Asia, and Africa. - Cayman Islands
The Cayman Islands is a preferred choice for businesses and investors seeking tax neutrality. It offers no direct taxation on profits, capital gains, or income and a strong legal framework that protects shareholder interests. - British Virgin Islands (BVI)
The BVI is widely known for its simplicity and efficiency in company formation. With no corporate or capital gains tax, it is a go-to jurisdiction for holding companies managing international assets. - Delaware, USA
Delaware’s business-friendly laws and low franchise taxes make it one of the most popular jurisdictions in the United States for holding companies. It is particularly favoured for its flexible corporate structures and robust legal protections. - United Kingdom (UK)
The UK’s extensive double tax treaty network, stable legal system, and participation exemptions on dividends and capital gains make it a trusted jurisdiction for global businesses. - Singapore
With its low-tax regime and strategic location in Asia, Singapore is ideal for holding companies seeking to tap into the growing markets of Southeast Asia. - Luxembourg
Luxembourg is known for its tax efficiency, political stability, and strong support for holding structures. It is a key hub for European and global investments. - Cyprus
Cyprus offers one of the most attractive tax regimes in Europe, including no withholding taxes on dividends and an extensive double tax treaty network.
Is a Holding Company Right for You?
Setting up a holding company involves more than just selecting a jurisdiction. Factors like your business objectives, the nature of your assets, and your tax strategy need careful evaluation.
How Kingsbury & Partners Can Help
At Kingsbury & Partners, our Private Office can connect you to the right partners to help you establish and manage holding companies in the world’s most advantageous jurisdictions.
From evaluating the best location for your needs to navigating local regulations and compliance, our experts provide a seamless experience tailored to your goals.
Get in touch with us today to discuss how a holding company could transform your business strategy. Let us help you unlock the benefits of this powerful structure and achieve your objectives with confidence.
