Holding Company in Belize

Over the years, there has been tremendous growth in the establishment of the offshore companies in Belize. The massive increase of the international business companies in the jurisdiction has given an upper-hand to establishing a holding company, another legal business entity entitled to hold the stock in other entities.

Belize has been an eye-opening investment ground to the business investors who have been looking for to invest in the offshore business segment. The flexible business environment, tax-exemption policies have made the region as one of the profitable investment grounds. If you are looking forward to investing in Belize offshore company formation, then this is a must-read for you.

The Concept of Holding Company

A legal business entity, a holding company, is entitled only to hold control over one or multiple business entities. They are not dedicated to getting involved in other business activities like operations, ventures, or other business-related activities. Belize is a profitable tax-haven jurisdiction that allows business investors to invest in the holding company business. In simple terms, a holding company can be regarded as a "parent" or "umbrella" company. On the other hand, the companies held by a holding company are regarded as a "subsidiary" company.

What Does a Holding Company Controls?

In general, an offshore holding company exists for controlling assets of other companies which includes:

  • Real estate property
  • Patents
  • Trademarks
  • Stocks
  • Other valuable assets of the company

Types of Holding Company

When it comes to the incorporation of a holding company, there are different types of holding company that one can proceed ahead with, which includes:

  • Parent holding company: This is one of the most widely used types of holding company where one company owns a maximum share value of its subsidiaries. For example, the Tata Tea company has got a higher stake control over Tetley, which is a UK based company, and thus, can be regarded as a parent-holding company.
  • Offspring company: Here, a new business entity gets established by an existing firm in the market, with the core objective of exercising control. For example, we can consider Engineering Construction Company Limited (ECC), which was incorporated by the engineering giant Larsen and Turbo (L&T).

Here, L&T is regarded as a parent company, and ECC is recognized as a subsidiary business unit.

  • Pure holding company: These business units are incorporated with the core aim of controlling the subsidiary entities. An easy example of this holding company is the Tata Group, which has different business units in multiple business segments.
  • Proprietary holding company:  This is a business entity which holds the entire stock that is issued by the subsidiaries. In such a business structure, that should have at least one shareholder and should not save more than 50 non-employee shareholders.
  • Intermediate holding company: This is another type of holding company which plays the role of a subsidiary and a holding unit for different business units.
  • Finance holding company: Such type of business entities offers non-banking services such as underwriting or investment advisory solutions. Some of the activities that can be performed by an FHC includes:
    • Insurance underwriting
    • Securities dealing
    • Merchant banking
    • Securities underwriting
    • Investment advisory services
  • Investment holding company: Such a business entity doesn't control the affairs of other business units. It invests in the securities of other companies and the members gain benefits through the medium of diversified investment.
  • Primary holding company: These business units can be regarded as standalone business units which is not a subsidiary of any other company. In simple terms, we can say that no other company holds control of these business units. For example, Unilever has numerous subsidiaries, but is not controlled by any other business entity and is regarded as a primary holding company.
  • Mixed holding company: This is a hybrid of business structures that is entitled to run its own business, and at the same time, also controls the subsidiary units. In other words, it is also called as a holding-operating company.

The Working of a Holding Company

As it has been established that a holding company is responsible for owning the subsidiary companies' assets, the entity also holds the power of hiring and firing the managers of the companies it owns. Assets like property, patents, trademarks and stocks are specific dimensions owned by a holding business entity. Under the companies act, 1956, a holding company has the possibility to

In the process, if a subsidiary company goes bankrupt, then it becomes a significant concern for the holding company to bear the relevant losses faced.

Benefits of a Holding Company in Belize

When it comes to incorporating a holding company in Belize, an International Business Company (IBC) turns out to be one of the most widely opted business entity. Belize holding company helps a business owner to grab numerous benefits, which includes:

  • Incorporating one helps in getting tax-exemption
  • One can protect the business assets and wealth from the creditors
  • It minimizes the risk of becoming insolvent
  • A holding company holds a centralized management structure
  • Opens up a new route for growth and investment
  • One can proceed with succession planning
  • Enter into the international financial market

Your Holding Company Guide| Business Setup Worldwide

To deal with the incorporations of a business entity turns out to be a challenge for foreign business investors. The documentation part is one of the essential components that can't be ignored, and the main challenge lies in clearing the process. Business owners prefer to proceed with the guidance of experts, which turns out to be a smart move. Have a look at the Core Reasons of Hiring an Offshore Business Consultant.

At Business Setup Worldwide, we take the initiative of helping the business investors to complete the process at ease. Our business advisors are well-versed with the offshore business incorporation process and can assist you in completing the same through tailored solutions.

If you are looking forward to starting your holding company at ease, feel free to discuss with our business advisors. Contact us today-we'd be glad to assist!