Eternity Law International — News — Holdings in Switzerland in comparison to holdings in other European countries

Holdings in Switzerland in comparison to holdings in other European countries

Published:
May 17, 2024

The best decision for a businessman, who wants to possess, manage or participate in the activity of any other business organization outside Switzerland, is registering a GmbH/AG holding company (corporation). 

Corporation owners get a lot of privileges, that can help in: 

  • saving on taxes;
  • protecting their assets; 
  • increasing the profits of the subsidiary; 
  • redistribution the dividends;
  • protecting the confident data of the business owners more efficiently. 

In spite of the great number of benefits that you have, like a holding owner in the territory of Switz., don’t forget also some pitfalls. They include the following:

  1. Swiss corporation owners should avoid engaging in independent business projects.
  2. They are free from paying high taxes.
  3. They are interested in understanding the logic of the complicated fiscal system.

Of course, you can register a corporation in another European state: Cyprus, the Netherlands, Ireland. But, in comparison with them, Switzerland is very stable, predictable, reliable state that can protect your business legally and, which is important, improve your reputation in business circles.

What should business person know about Swiss holdings?

Development of the Swiss financial market is, of course, out of competition. That’s why, planning to set up a company for managing the other companies’ assets seems like a very attractive idea.

Now let’s study the basic demands for the registers of corporation in Switzerland.:

  • assets of subordinate companies must be at least 2/3 of the total value of the holding’s assets/profits;
  • corporation must own assets of another organization for at least 1 year;
  • ownership of other company must be at least 10% (= its value is minimum one million CHF).

There exist some more significant factors, that should be considered by future owners of a holding in Switzerland

Before registering a Swiss corporation, you are to be aware of the following:

  • some exemptions are not actual since the beginning of 2020 (discounted capital tax and zero income tax inside the canton);
  • the income of corporations of the Zug canton is taxed at a lowered rate (less than 12% for corporate and personal taxes), including taxes on the level of federation, district, and the territory (town or city);
  • each of the Swiss districts is suitable for alternative occupations, when your aim is to set up a Swiss holding company;
  • you’ll get a 50% discount if your occupation is connected with research work or technical development;
  • net income, received from individual sources (patents, related rights) is included in the tax base with a 90% discount;
  • the dividend tax (corporation with qualification) is the same – 50%;
  • direct federal tax became higher: from 10% to 70%.

Which kinds of activities are available for holdings in Switzerland?

If you have registered a Swiss corporation, you can: 

  • manage the foreign assets and capitals management, own intellectual property;
  • manage the group (one of the activity examples is:‘cost-plus’ scheme for transfer pricing);
  • open any other business, not on the territory of Switzerland (sale of intellectual property rights is not the exception).

So, after the procedure of registering a corporation in Switz., you will see the following benefits for your occupation:

  1. If you want to be an investor with the controlling stake, the decision of setting up a holding looks very attractive.
  2. Lower federal tax.
  3. Cantonal taxes are also lower in some districts of Switz.
  4. Qualification requirements are more simple for corporations.
  5. It is possible to avoid double taxation (on the basis of special agreements that act on the territory of Switzerland).
  6. Investment gains, paid to Swiss business organizations by an EU state, are not taxed.
  7. The Swiss holding company registration conditions are transparent.
  8. Full exemption from dividend/income tax is possible.
  9. You have an opportunity for choosing the district that mostly fits your business activity.
  10. Numerable tax incentives are available.
  11. Being an owner of corporation registered in Switzerland, you’ll earn a good reputation as a businessman to become widely known in world business circles.

Being politically, economically and financially stable, Switz. also suggests the best banking services in country. All these facts make it a trustworthy state for setting up here a holding company.

Where is the best place in Europe for a holding company?

If you are planning to set up a corporation in one of the EU states, your best choice is Switzerland.

What is the holding regime in Switzerland?

The main requirements for the corporation owners in Switzerland are the following:

  • assets of the subordinate companies must be at least 2/3 of the total value of the holding’s assets/ profits;
  • corporation must own assets of another organization for at least 1 year;
  • ownership of other company is to be at least 10% (= its value is a minimum one million CHF).

Benefits:

  • numerable tax incentives;
  • possibility of full exemption from dividend/income tax;
  • more simple qualification requirements;
  • transparent conditions of registration;
  • dividends, paid from EU countries (without being taxed).

Is Switzerland a good country to do business in?

Each of the Swiss cantons opens wide opportunities for different business occupations.

Why are most headquarters in Switzerland?

Switzerland is among the politically, economically and financially stable countries of Europe. It provides the best bank services and gives wide opportunities for business, research work and technical development.

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