Establishing a holding company in Switzerland is a fantastic option for businesses that want to invest. One of the most lucrative business destinations for people from all over the globe, Switzerland offers unparalleled opportunities for business owners. The country is divided into administrative divisions known as cantons, with Canton Zug being the most attractive option.
According to Swiss law, a holding company is one whose primary purpose is to manage and hold their participation in several different companies. In order to be classified as one of the many Swiss holding companies within the country, the company should not participate in any other business activity. The reason why so many people prefer opening their company’s headquarters in Canton Zug is simply because of the low taxes and the business-friendly environment that it offers. 1 in 4 holding companies throughout the country are established in Canton Zug.
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Important Regulations
There are a few important regulations that business owners must keep in mind before attempting to build a holding company. For starters, the investments held by the company, or the revenues generated from the company’s participation in other companies, must represent at least two-thirds of the company’s entire assets or the income that has been generated by the company.
Secondly, the company must hold at least one participation that is above 10%, or the total shares of the participation, the value of which should exceed CHF 1,000,000. These requirements must be met before a company can be classified as a holding company that is exempt from the cantonal tax levied in Zug. Moreover, the capital tax is also reduced at 2 per million.
Allowed Activities
While holding companies in Switzerland are not allowed to conduct any other business activity, there are certain activities that they are allowed to do. Asset management, which includes managing foreign IPs and surplus cash, group management functions and foreign business activities that do not include the realization of IPs, is an example of an allowed activity.
If you want to establish a holding company in Switzerland, the first thing that you will need to do is contact a professional administration firm within the country. Depending on the size of your company, the nature of your business, and other specifications of your company, the administrative firm will guide you through the process of setting up your holding company.
Swiss Law clearly defines the objectives and requirements that must be met before a company can be registered. The administrative firm will help you compile all of your necessary documents and create the application that will be filed with the registrar in the Canton. The registrar will then proceed with the registration process and correspond with the firm.
