Swiss Holding Companies

A holding company will hold participations of a certain importance in domestic or foreign subsidiaries. In Switzerland, if deemed ‘holding’ a company possesses at least 10% of the share capital of a other company.

Due to this status, dividends received from qualified subsidiaries may benefit from the participation exemption which exempts such income from tax.

Uses and advantages of a Swiss holding company:

  • In effect, when foreign participations distribute dividends to Swiss holdings, withholding tax may be reduced, sometimes to 0%, when a double taxation agreement applies. The distributed dividends benefit from the “participation privilege”. Furthermore, withholding tax on distribution of dividends out of Switzerland may also be reduced to 0%, if a double taxation agreement applies.
  • Exemption from withholding tax on payment of interest - According to Swiss domestic law, commercial interest, including loans from foreign shareholders paid by a Swiss company are not subject to withholding tax, while the amount of the interest is deductible from the taxable profits.
  • Exemption from withholding tax on payment of royalties – According to Swiss domestic law, no withholding tax is levied on payments of royalties, management fees, rents, licenses and technical assistance fees and similar payments made by a Swiss company

Our services include:

  • Tax analysis of the most adequate structure, with the support of our local tax experts
  • Set up and management of the structure
  • Incorporation and domiciliation of companies
  • Provision of board members
  • Liquidation of companies
  • Business plans
  • Fund raising support
  • Debtors’ recovery services
  • Drafting of legal documents and agreements
  • Negotiation of tax rulings