In its simplest sense, a holding company is essentially an organisation that is instituted for the sole purpose of owning, acquiring, and managing other firms or subsidiaries.
However, it’s important to note that there is a myriad of advantages to using a holding company, many of which can help you enhance your future business prospects, insulate your personal finances, and develop your entrepreneurial efforts with unprecedented simplicity.
This brief report will provide an introductory analysis of why so many people from every corner of the globe are starting to establish Swiss holding companies in today’s day and age.
The Swiss Economy
First of all, Switzerland is home to one of the most accessible, valuable economies in the world:
- Second-highest GDP per capita on Earth
- The environment is tailor-made for small and medium size businesses, as shown by the fact that over 90% of all companies in Switzerland have less than 200 staff members in total
- Centralised location in Europe, which allows for instantaneous communication with neighbouring countries, as well as same-day correspondence with the United States and Asian nations
- Nearly three-quarters of the entire Swiss economy is comprised of the service sector, while the remaining slice of the pie is comprised of industrial productivity
- The value-added tax in Switzerland is actually the lowest in all of Europe
As such, Switzerland can put forth unsurpassed stability in terms of its fiscal climate, domestic politics, tax rates, and socioeconomic landscape.
The Specifics of Holding Companies
Establishing a holding company involves a straightforward, easy-to-understand process, and this unique entity is able to present a wide range of benefits:
- A holding company enables you to assume control of other corporations, partnerships, and LLCs by obtaining shares, although holding companies are also used to acquire real estate, machinery, patents, trademarks, stocks, and alternative assets.
- Holding companies are shielded from business-related losses. If one of the owned entities goes bankrupt, the corresponding creditors and debtors cannot pursue repayments from the holding company; the holding company will simply have to account for a standard capital loss as opposed to a more substantial forfeiture.
- Instead of putting your own financial future on the line, holding companies allow you to essentially own assets through the channel of the holding company, but you’ll never be held personally liable for any debts, litigations, and other typical hazards.
- By creating independent subsidiaries that maintain separate control over your properties, trademarks, intellectual resources, investments, and other assets, you can reduce the risk exposure for each distinctive subsidiary as well as the actual holding company.
Major conglomerates and international corporations rely heavily on holding companies to safeguard and preserve their scope of operations, but you don’t have to be a magnate or tycoon to form your very own holding company, so be sure to reach out to a reputable company administrator in Switzerland to begin learning about your options.