A holding company is a type of company that aims to have a controlling interest in other companies, which are called subsidiaries. The role of the parent corporation is limited to controlling the subsidiary's policies and supervision management decisions, but it can't run day-to-day operations.
Holding companies are immune from losses and debts accrued by their subsidiaries. If a subsidiary files for bankruptcy, its creditors can't go after the holding company to get back what is owed.
A holding company, as the name suggests, exists for the sole purpose of controlling other companies. Holding companies may own just companies and property, such as patents, trademarks, real estate, stocks, and other assets.
A holding company purely deals with the model of earning a passive income. Business investors choose to proceed ahead with incorporating a holding company since it relies on the business model of holding stocks of other companies and earning profits by forming a corporate group.
Now, when it comes to incorporating a holding company, an offshore company setup can help you get a lot of benefits:
- Offshore jurisdictions offer numerous tax benefits, compliance obligations, related costs, and banking privacy.
- It holds stability and soundness of the location's economy, politics, judicial structure, and corporate laws.
- Corporate law permits the creation of the business type that you are looking for.
- It turns out to be a feasible option to protect assets and wealth.
Apart from the listed benefits, a holding company can help in international tax planning as well.
Top Offshore Jurisdictions to Start a Holding Company
Some of the popular offshore locations that the business investors target to start an offshore holding company are:
One of the best countries worldwide, Hong Kong, holds a reputed position for offshore company incorporation. It is a gateway to approach the eastern market and is a viable platform for earning high returns on investments.
Be it an e-commerce company or trading; Hong Kong is a feasible destination to earn better profits. A few of the critical features of offshore company formation in Hong Kong are:
- Sanction 100% of foreign business's proprietorship
- Provide an exceptional pro-business tax system, i.e., free corporate tax for forfeiture profits, lower tax rate from 8.25% to 16.5%.
- Unrestricted sales tax, capital gain tax, dividends, and interest tax
- No exchange limitations
- Open trade policy, competitive economy, the autonomous legal system
- International commercial place concentrated with 75% of the largest banks in the world
- Effortless entrée to the growing market of mainland China
The following best offshore company location that business investors can count on is Singapore, one of the growing grounds for start-ups, entrepreneurs, and investors.
A perfect destination that allows the business investors to manage their wealth and assets efficiently.
When it comes to a holding company, investors can entirely rely on the tax-haven jurisdiction to proceed forward.
Few reasons that provoke the business investors to move forward and invest in Singapore are:
- Explicit tax scheme: Only businesses administered in Singapore are taxed. The corporate income tax is covered at 17%, much less than that in other jurisdictions.
- The accessibility of over 70 tax treaties settled between Singapore and foreign jurisdictions.
- Limited tax exemption schemes and several catalysts for start-ups and investors, particularly in fintech and hi-tech innovation industries.
- Have one of the world's premium banking systems.
- Highly skilled labour force, favourable visa schemes for foreign business staffs.
The British Virgin Island (BVI)
Up next is the British Virgin Islands that you can count on to grab an ample amount of benefit? It is a tax harbour and an emerging offshore business destination that provides high-end security and confidentiality to investors.
Besides, some other pull factors make the BVI become one of the top pick offshore company jurisdictions:
- Tax relief for profits derived outside of the BVI (*)
- Simplicity in doing business and banking
- USD used as an official currency
- No currency exchange control
- No annual meeting requirements
- No financial reports, yearly return requirements
BVI Business Company is seen as the most popular medium for businesses looking for offshore investments, savings, international trade, estate planning, corporate banking, and other objectives. A BVI BC can also enjoy favourable tax reimbursements and minimized compliance requirements by the islands' business-friendly offshore setting.
Knowing the core grounds is essential for an investor, and thus, here's a guide on British Virgin Islands Offshore Company Formation Rules that you should focus on.
The Cayman Islands and the BVI share many common attributes. Both are prominent offshore commercial centres for international business services, associated with economic and political soundness, easy incorporation, and a set of their tax-associated gains for investors and offshore players.
But a Cayman LLC is freed from local corporate tax for any earnings generated exterior to its jurisdiction. There is no exchange control, no direct taxes, and the most minor reporting requirements for limited liability companies (LLCs).
It is also a perfect option for business seekers of asset protection, investment funds, private equity transactions, securitizations, movable or immovable assets holdings, etc.
Belize is a fantastic location for offshore businesses, high-net-value individuals, and international investors to shift offshore.
Belize offshore company establishment comes with a competitive price, immediate incorporation process combined with many desirable privacy policies and tax assistance for non-residents.
It is recommended that the business investors proceed with an offshore bank account during the company formation process because there are multiple Benefits of Belize Company Formation with a Bank Account.
Starting an offshore business in Belize is a profitable move because of the following benefits:
- USD as an official currency
- Tax exemption on overseas income
- The simple and straightforward incorporation process
- No accounting requirements or tax return
- High level of non-disclosure and privacy concerning records of directors and shareholders, and account related information
- The noteworthy banking sector supporting businesses provides a high liquidity ratio of banks, remote bank account opening, low deposit, etc.
International Business Company (IBC) is the most frequently used type of business structure for outsiders to Belize. This offshore location is believed to be among the fastest IBC Registry.
Discover the country that will benefit the needs and work best for the company!
It is also important to devote your time to apprehend the choice, examine crucial factors like the jurisdiction's status, trustworthiness, tax policies, compliance requirements, etc., and then narrow down the list to reach the best-suited option.
Our accomplished experts at Business Setup Worldwide can walk you through deciding the best jurisdiction for your holding company offshore. Our business incorporation experts can guide you through the complete incorporation process of a holding company.
Contact us today to start your offshore foundation right away and make an asset protection plan that would last indefinitely.