The concept of holding company is different in Liechtenstein than in other European countries. A Liechtenstein holding is considered a legal person which acts as an umbrella company for another company. Also, the holding company is deemed as a legal person with a registered office in Liechtenstein. The holding company is one of the most advantageous types of structures from a taxation point of view. It is also worth noting that there are several types of holding companies which can be set up in Liechtenstein.
Our company formation agents in Liechtenstein can offer a detailed definition of the holding company.
Types of holding companies in Liechtenstein
As seen above, there are several types of holding companies to be established in Liechtenstein. These are:
- – operational holding companies;
- – management holding companies;
- – finance holding companies;
- – organization holding companies.
Among these, the operational holding is the only type of company allowed to carry out commercial activities in Liechtenstein. Our company registration agents in Liechtenstein can offer more information on all types of holding companies.
Find out more information on the Liechtenstein holding company from the video below:
The operational holding in Liechtenstein
The operational holding company is also referred to as operative holding and is similar to other structures available in other countries. In Liechtenstein, the parent company will manage the assets held in its subsidiaries or branches located here or in other countries. However, the other activities will be carried out by the subsidiaries. This is a preferred form for large companies operating in Liechtenstein.
The management holding company in Liechtenstein
The management holding is the opposite of the Liechtenstein operative holding, meaning its only role is to hold shares or other assets in the subsidiaries. The management holding will organize the effective management of its subsidiaries and will control the cash flow in the subordinate companies.
The Liechtenstein financial and the organizational holdings
These types of structures are not that common in the Principality. In the case of a financial holding, it will only be in charge with administering the group’s assets without carrying out any operational activity. With respect to the organizational holding, it is used to take over startups and other companies. It also plays an important role in the organization of the new acquisitions, as its name says.
How to set up a holding company in Liechtenstein
A particularity of a Liechtenstein holding company is that is can take one of the following forms:
- – of a foundation;
- – of a trust;
- – of an establishment.
In order to open a holding company in Liechtenstein, one is required to draft the incorporation documents of the company and have them legalized by a public notary. The establishment must be registered with the Companies Register. In order to set up a holding company as a foundation in Liechtenstein, the foundation documents must be prepared.
Liechtenstein holding companies registered under the form of establishments must have a minimum share capital of 30,000 CHF. Foreign investors should know that Liechtenstein’s national currency is the Swiss franc. Also, the holding company set up under the form of an establishment is the only one allowed to carry out commercial activities.
Taxation of holding companies in Liechtenstein
Creating a holding in Liechtenstein comes with various advantages, especially when it comes to their taxation. Among the tax advantages offered by a Liechtenstein holding company, we remind the following:
- – the participation deduction, which means that dividends and capital gains resulted from the sale of investments are not taxed in Liechtenstein;
- – a flat income tax rate of 12,5%;
- – no capital gains tax;
- – special tax deductions related to intellectual property ownership.
For information on the main advantages of holding companies and their taxation, please feel free to contact our company formation agents in Liechtenstein. You can also rely on us for assistance in setting up other types of companies in Liechtenstein.