Switzerland is one of the best places to start your own company. The country offers plenty of tax concessions to new businesses. However, holding companies are generally different from ordinary companies. In Swiss law, a holding company is one which purchases and holds shares of different companies. A holding company is not allowed to participate in any other commercial activity in Switzerland.
A Swiss holding company must meet several requirements in order to be registered as a holding company. Here are some of the regulations that a company must meet in order to preserve its status.
- All the investments held by a holding company must represent at least each of the 2/3 of the company’s entire assets, as well as the entire income generated by the holding company.
- Moreover, the company must also have a participation that exceeds 10% of the total shares of the participation whose value exceeds a total of 1,000,000 CHF in order to be considered as a holding company.
- The participations held by the company must have a minimum holding period of at least one year.
If you are interested in setting up a holding company or partnership in Switzerland, here are a few important things that you should keep in mind.
Select the Right Canton
The Canton of Zug is one of the best places to set up your own holding company. Cantons are commercial districts in Switzerland, and they have varying tax rates. As the promoter of a holding company in Canton Zug, you will be given plenty of tax concessions. Most people don’t really pay attention to the Federal and State tax laws in different cantons. A holding company is generally exempt from Swiss federal taxes.
Even though Swiss holding companies aren’t generally allowed to participate in other commercial activities, here are some of the commercial activities that a holding company can participate in:
- Asset management, including the management of surplus cash as well as foreign intellectual property
- Foreign business activities including the realisation of all IPs
- Handling group management functions
Starting Your Holding Company
When you settle in Switzerland, the first thing that you should do is hire a company formation and administration firm. A company administration and formation firm can help you resolve many of your problems and get your business up and running in no time.
The first thing that you need to do is file an application with the registrar. Then create the memorandum of association. Once the memorandum is approved, you will have to create the articles of association and then submit them with the registrar of the Canton. All of this requires careful compliance with local and national laws, or the Commission may decide to revoke your application. A company formation and administration firm can help you resolve all of these issues and get your business registered within only a few months. They might charge a fee, but if you are looking to start investing quickly, hiring a company formation firm is a great idea.