Switzerland is a beautiful place to visit. It is also an ideal location for businesses. That is because the country offers benefits to Swiss holding companies that give them an edge competitively. This edge normally comes in the form of taxation. Also, you can enjoy the benefits of being a holding company in ways that are both fiscal and political. Because Geneva and Zug are major centres for the trading of commodities, many companies find that these places are business friendly.
When you can enjoy an excellent support system for your business, you are not going to overlook the advantages that a Swiss holding company provides. You can use this type of setup if you work as a banker, accountant, lawyer, insurance company, or corporate service provider. In addition, you are contributing to the global economy when you consider the benefits of being a Swiss holding company.
Tax efficiencies cannot be overstated, as a Swiss holding company enjoys major exemptions and concessions when it comes to taxation. These taxes are both cantonal and federal in nature and can be reduced when certain criteria are followed and met.
Cantonal Tax Exemption Status
Within Geneva itself are 26 cantons. However, Geneva is considered the most important canton with respect to financial transactions. By becoming one of the Swiss holding companies, you can enjoy cantonal tax exemption or a privileged tax status. You just need to meet three basic conditions. One of the conditions is to define your main activity. The primary activity must have the long-term overview of equity type investments. You also should not operate any business activities in Switzerland.
However, certain activities are approved. These activities include the management of your company’s investments and the provision of services by a consolidated group or the holding of an intellectual property. You can also secure debt financing for subsidiaries within your company.
If you are in it for the long term, you need to show that your participations represent two-thirds of your balance sheet assets or, at least, the income earned from dividends and capital gain allocations. Considered participations include shares from cooperatives, limited liability companies, and corporations.
Become a Major Player
When you meet the above conditions, you will find that it will be easy to become one of the major players amongst holding companies. At this time, if you elect to follow this course, you can also receive a concession when it comes to paying your federal tax rate. At the federal level, the rate of tax is now 7.83%. Also, the income in dividends derived from the disposal of participations may be subject to a tax deduction. In this case, you usually are exempted from paying a tax.
If you own shares of stock, you can benefit greatly by taking advantage of the taxation initiatives that go along with being a part of a holding company. Not only can you slash taxes on dividends received, you do not have to follow any holding period requirement.
Learn more about the opportunities afforded to holding companies by further reviewing the benefits online.