Holding company Switzerland

The purely holding companies established in Switzerland have as objective the long-term management of participations. They have at least 2/3 of the total assets and income derived from these participations and the company does not have a commercial activity in Switzerland. The capital, which is not qualified as participation income,  is taxed with a 7.83% corporate tax.

It’s an instrument used mostly because of the advantages which comes along with its establishment, especially tax incentives. In order to beneficiate from the vast network of double tax treaties signed by Switzerland all over the years is necessary to keep at least 10% of the shares with the voting rights attached to it from a company. The percent was decreased from 20% in the government’s attempt to attract new investors.

 

The qualified income such as dividends, capital gains and liquidation dividends can remain exempt from the income corporate tax if certain conditions are met, such as receiving dividends from a subsidiary where the holding company keeps at least 10% of the nominal share capital or the value of the participation has a market value of at least CHF 1 million. Unlike other jurisdictions, there is no minimum holding period. The exemption is also granted on the capital gains which come from the concession of at least 10% of the subsidiaries nominal share capital but in this case the shares must have been held for at least 12 months.

Besides the above advantages, the commercial interest, even though it is related to loans from foreign shareholders paid by a Swiss company, is not subject to withholding tax. Also there is no withholding tax on payments of royalties made by a Swiss company.

 

Other advantages granted to the Swiss holding companies are related to the VAT refunds.

According to the regulations for VAT registration in Switzerland, the holding companies located here can choose to calculate recovery rates on a standalone basis or to take into account the business activities of their subsidiaries. Therefore, the holding companies situated in Switzerland can choose to reclaim the input tax incurred in relation to the holding or sale of qualifying investments.

 

Because of all the above, a Swiss holding company is considered an advantageous investment vehicle by the local and foreign investors. Please contact our Swiss law firm for more information about holding companies. 
Our lawyers can also put you in contact with their Dutch partners in case you are thinking of starting a company in the Netherlands.  Furthermore, if you intend to open a company in Denmark, we can put you in contact with our Danish partners.