Holding companies have long been recognised as an effective instrument for international corporate structuring and tax planning for both multinational groups and private investors. When establishing an international holding company, one of the key considerations is the choice of jurisdiction, as this will determine not only the overall tax burden but also the regulatory framework applicable to the structure.
- Participation exemption regimes in UAE, Netherlands, Luxembourg and Malta can fully shelter inbound dividends, but rely on precise ownership, holding-period and asset-composition tests.
- Beneficial ownership transparency now varies widely: some jurisdictions offer full public access, others restrict it to authorities, which can materially affect confidentiality and reputational risk.
- Audit obligations differ sharply: while Hong Kong, Cyprus and many UAE entities require audits regardless of size, others exempt small companies, reducing compliance costs.
- Withholding tax on outbound dividends is not uniformly low; jurisdictions like Netherlands, Luxembourg, Switzerland and Ireland often rely on treaty networks and EU directives for real efficiency.
- “Favourable” corporate tax rates may mask extra municipal or surtax layers (Luxembourg, Switzerland) or complex refund systems (Malta), so effective rates require careful modelling.
This article provides an overview of the most popular jurisdictions for establishing holding companies.
Holding Companies: Definition and Advantages
In international practice, a holding company is generally understood as an entity that does not carry on any operational activities. Its principal function is to own and manage various assets, such as:
- shares or other interests in companies;
- real property;
- intellectual property rights; and
- other assets.
Accordingly, a holding company’s profits are generated by income received from its subsidiaries, for example in the form of:
- dividends,
- interest on loans,
- rental payments, or
- royalties.
The main advantages of setting up international holding structures include:
- risk mitigation, since each subsidiary of the holding company has an independent legal personality and is liable for its own obligations;
- the ability to gain control over assets without the need to hold 100% of the shares or interests in the subsidiaries;
- access to favourable tax regime and tax benefits; as well as
- the ability to obtain financing on more favourable terms.
At the same time, when setting up and running a holding company, it is important to bear in mind the potential risks, such as:
- the high cost of establishing and maintaining the structure;
- difficulties in management or conflicts of interest;
- the need to prepare consolidated financial statements for the group as a whole;
- the need to take into account transfer pricing rules, since a holding company primarily engages in transactions with related parties.
Criteria for Choosing a Jurisdiction for an International Holding Company
Once the decision to set up a holding structure has been made, the next step is to choose the most appropriate jurisdiction. The table below sets out the main factors to consider when making that choice:
| Factor | Explanation |
|---|---|
|
Tax Regime |
The following aspects are typically assessed:
|
|
Network of Tax Treaties |
Double tax treaties (DTTs) generally provide for reduced withholding tax rates. |
|
Corporate Governance |
Important aspects to consider include:
|
|
Financial Reporting and Audit Requirements |
Maintaining accounting records is mandatory in all of the popular holding jurisdictions. However, the scope of the obligations to prepare financial statements and to conduct an audit may vary. |
In addition to the factors discussed above, other aspects may also be taken into account when choosing a holding jurisdiction, including company maintenance requirements, the practical application of the legal framework, and the specific features of a particular business. For this reason, a comprehensive assessment is always needed, with regard to the intended objectives of the holding structure.
The following sections examine some of the most popular international holding jurisdictions in light of the factors outlined above.
Overview of Popular Holding Jurisdictions
Establishing a Holding Company in the UK
A company in the UK can be set up in various legal forms. The most suitable options for setting up a holding company include:
- private limited company (Ltd), and
- limited liability partnership (LLP).
Both forms involve a relatively straightforward corporate structure and are available to directors, shareholders (or partners) of any residence and nationality.
Information about the directors and persons with significant control (PSCs) in the UK is filed directly with the registrar and is publicly available (with the exception of certain information about PSCs). The register of members, however, is kept at the company’s registered office and is made available on request.
When choosing the UK as a jurisdiction for setting up a holding company, the following tax rates should be taken into account:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
from 19% to 25% depending on the level of taxable profits |
|
Tax on dividends received by a UK company from its subsidiaries |
In most cases exempt from taxation |
|
Withholding tax on dividends paid to the holding company’s shareholders |
0% |
The UK has around 140 tax treaties in place.
The scope of the financial statements required for UK companies (Ltd and LLP in particular) varies depending on the size of the entity. Small companies and micro-entities are exempt from the audit requirement.
Establishing a Holding Company in Hong Kong
Hong Kong companies, such as private companies limited by shares, are also widely used for holding purposes. There are no nationality or residence requirements for their directors or shareholders. The director must be an individual. In addition, the company must have a secretary who shall be a Hong Kong resident.
Hong Kong companies shall maintain registers of directors, shareholders, and beneficial owners. Information about directors and shareholders is publicly available, whereas the register of beneficial owners is kept internally by the company itself and is only disclosed at the request of Hong Kong government authorities.
The Hong Kong tax system is based on the territorial principle. For a holding company, the most relevant tax rates are as follows:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
8.25% or 16.5% depending on the level of taxable profits. |
|
Tax on dividends received by a Hong Kong company from its subsidiaries |
As a general rule, dividends are not subject to tax. However, dividends received by a holding company are taxable in Hong Kong if
To preserve the exemption, certain additional conditions must be met. |
|
Withholding tax on dividends paid to the holding company’s shareholders |
0% |
Hong Kong has more than 50 tax treaties in place.
All Hong Kong companies prepare and file financial statements. Small companies are entitled to a simplified reporting regime. That said, the financial statements of Hong Kong companies are subject to a mandatory audit, regardless of the company’s size.
Establishing a Holding Company in Singapore
The private company limited by shares is the most popular form for setting up a business in Singapore. Shareholders may be of any residence. Directors must be individuals, with at least one of them being a Singapore resident. In addition, Singapore companies must have at least one secretary.
Singapore companies must maintain registers of directors and shareholders, including nominee directors, as well as a register of controllers (beneficial owners). Information about directors and shareholders is publicly available, whereas information about beneficial owners is only accessible to government authorities.
From a tax perspective, the following rates are of interest for a Singapore holding company:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
Territorial principle of taxation. Standard rate of 17%, with a partial exemption available. |
|
Tax on dividends received by a Singapore company from its subsidiaries |
Exempt from tax if the dividends:
|
|
Withholding tax on dividends paid to the holding company’s shareholders |
0% |
Singapore has around 100 tax treaties in place.
Singapore companies must prepare and file financial statements. Small companies may be exempt from the audit requirement.
Establishing a Holding Company in the UAE
It is possible to incorporate a company in the UAE, including for use as a holding company, either on the mainland (UAE mainland companies) or in one of the UAE’s free zones. Regardless of the place of incorporation, UAE companies may be 100% foreign-owned and may have directors of any nationality or residence.
One of the features of the UAE is the absence of a single national company register. Instead, separate registers are maintained by the authorities responsible for the incorporation of mainland companies and by the regulatory authorities of individual free zones. As a result, the scope of the information available from these registers varies depending on where a company is incorporated.
That said, the requirement to maintain a register of beneficial owners is imposed at the federal level and applies to all UAE companies, including free zone companies (with a few exceptions). Although this information is filed with the registrar, it is not publicly available and may be accessed only by certain government authorities.
The UAE tax regime is generally favourable for setting up holding structures. In particular, the following rates apply:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
0% or 9% depending on the level of taxable profits. Special exemption rules apply for qualifying free zone persons in the UAE. |
|
Tax on dividends received by a UAE company from its subsidiaries |
Dividends are not subject to tax where the participation exemption conditions are met (see below). |
|
Withholding tax on dividends paid to the holding company’s shareholders |
0% |
The participation exemption regime in the UAE applies where the ownership interest is at least 5% (or the acquisition cost exceeds AED 4 million), provided that the following conditions are met simultaneously:
- the interest has been held for an uninterrupted period of at least 12 months (or is intended to be held for that duration);
- the subsidiary is subject to corporate tax at a rate of at least 9% in its country of residence;
- the ownership interest entitles the UAE company to at least 5% of the distributable profits and at least 5% of any liquidation proceeds; and
- the share of the subsidiary’s assets that would not qualify for the participation exemption if held directly must not exceed 50%.
The UAE has around 140 tax treaties in place.
UAE companies must prepare financial statements. An audit is mandatory for mainland limited liability companies (LLCs) and joint stock companies (JSCs). For free zone companies, an audit is required in accordance with the rules of the specific free zone.
Establishing a Holding Company in Cyprus
Company formation in Cyprus is possible in various legal forms; however, the private limited company (Ltd) is most commonly used for holding purposes.
Such a company must have at least one shareholder and one director, who may be either individuals or legal entities of any residence and nationality. Appointing a company secretary is mandatory in Cyprus.
Information about the directors, shareholders, and secretaries of a Cyprus company is publicly available. Companies are required to maintain and keep registers of beneficial owners and to file this information with the relevant government authority. However, this information is not accessible to the general public and may only be disclosed to government authorities.
The Cyprus tax regime is particularly favourable for setting up a holding company. A brief overview of the applicable tax rates is set out below:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
15% (as of 1 January 2026) |
|
Tax on dividends received by a Cyprus company from its subsidiaries |
0% |
|
Withholding tax on dividends paid to the holding company’s shareholders |
0%, as a general rule. Exceptions:
|
Cyprus has double tax treaties with more than 60 countries, providing for reduced withholding tax rates.
There is an obligation in Cyprus to prepare financial statements. The financial statements of Cyprus companies are subject to a mandatory audit, regardless of the level of profits.
Establishing a Holding Company in the Netherlands
A holding company registered in the Netherlands is typically established in the form of a private limited company (BV). Shareholders and directors of a BV may be either individuals or legal entities of any nationality, country of registration, or residence. Having a single director is sufficient for a BV.
The Netherlands maintains a centralised register of shareholders and directors of companies, which is open to third parties on a fee basis. A register of beneficial owners is also kept centrally; however, access to information on beneficial owners is limited to certain government authorities, financial institutions, and specific persons who can demonstrate a legitimate interest in obtaining that information.
The Netherlands is one of the most favourable jurisdictions for setting up a holding company. The key tax rates are set out below:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
19% and 25.8% depending on the level of taxable profits. |
|
Tax on dividends received by a Dutch company from its subsidiaries |
Exempt from taxation where the participation exemption conditions are met (see below). |
|
Withholding tax on dividends paid to the holding company’s shareholders |
The standard rate is 15%. The rate may be reduced by:
|
The exemption for dividends received from subsidiaries is available where the Dutch holding company holds at least 5% of the shares in the subsidiary and where one of the following conditions is met:
- the subsidiary is not a portfolio investment company;
- the subsidiary is subject to tax at a reasonable effective tax rate, calculated under Dutch tax principles; or
- less than 50% of the subsidiary’s assets consist of passive assets.
Dutch BVs are required to prepare and file financial statements. For medium-sized and large companies, an audit of the financial statements is mandatory.
Establishing a Holding Company in Luxembourg
When establishing a company in Luxembourg for holding purposes, the most commonly chosen form is a SOPARFI, a vehicle used for holding assets and making direct investments.
A SOPARFI may be established in the form of an SA (public limited company), an SARL (private limited liability company), or an SCA (partnership limited by shares). The requirements relating to the minimum number of directors and shareholders, as well as the minimum share capital requirements, vary depending on the legal form chosen.
Luxembourg maintains centralised registers of directors, shareholders, and beneficial owners. Information about directors and shareholders is publicly available; however, access to the register of beneficial owners is granted only to the competent authorities and to persons who can demonstrate a legitimate interest in obtaining that information.
Luxembourg SOPARFIs enjoy a favourable tax regime, which includes, in particular, the following rates:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
14-16% depending on the level of taxable profits. In addition, the following taxes apply:
As a result, an overall effective tax rate is 23.87% (in Luxembourg City). |
|
Tax on dividends received by a SOPARFI from its subsidiaries |
Exempt from taxation where the participation exemption conditions are met (see below). |
|
Withholding tax on dividends paid to the holding company’s shareholders |
The standard rate is 15%. The rate may be reduced by:
|
Dividends received by a SOPARFI are exempt from tax where all of the following conditions are met simultaneously:
- the SOPARFI holds at least 10% of the subsidiary (or has an investment of at least EUR 1.2 million);
- the interest in the subsidiary has been held continuously for at least 12 months;
- the subsidiary may be resident or non-resident, but must be subject to a tax comparable to Luxembourg corporate tax (the benchmark being no less than 8%).
As a general rule, Luxembourg companies are required to prepare and file financial statements. SOPARFI-type companies may file abridged financial statements without an audit, provided that their sole activity consists of holding ownership interests.
Establishing a Holding Company in Switzerland
When setting up a company in Switzerland, the most commonly chosen form is the public limited company (AG), which is also well suited for holding purposes. The share capital of AG is CHF 100,000, part of which must be paid up before the company is incorporated.
Shareholders may be individuals or legal entities (whether Swiss residents or non-residents). However, at least one director must be a Swiss resident.
From October 2026, Switzerland will introduce a beneficial ownership transparency regime under which a central register of beneficial owners will be established. However, the register will not be publicly available, and access to its information will be restricted to the competent authorities. Information relating to directors is publicly available, whereas the share register of an AG remains an internal corporate document.
From a tax perspective, the following rates are of relevance for a Swiss holding company:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
Taxation applies at the federal, cantonal, and communal levels. The combined effective rate varies from around 11.66% to 20.54%, depending on the canton. |
|
Tax on dividends received by a Swiss company from its subsidiaries |
0%, where the Swiss company holds at least 10% of the subsidiary’s capital (or an interest with a market value of at least CHF 1 million). |
|
Withholding tax on dividends paid to the holding company’s shareholders |
The standard rate is 35%. The rate may be reduced by:
|
Filing financial statements is mandatory in Switzerland. The audit requirements depend on the size of the company.
Establishing a Holding Company in Ireland
It is possible to incorporate a company in Ireland, including for holding purposes, in the form of a private limited company (Ltd). Shareholders may be individuals or legal entities of any residence. However, at least one director must be an EU resident.
Information relating to the directors and shareholders of Irish companies is publicly available. In addition, Ireland maintains a central register of beneficial owners, access to which is available to third parties that can demonstrate a legitimate interest in obtaining such information.
Ireland also offers a favourable tax regime for holding companies, including the following key tax rates:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
|
|
Tax on dividends received by an Irish company from its subsidiaries |
The following rates apply:
|
|
Withholding tax on dividends paid to the holding company’s shareholders |
The standard rate is 25%. The rate may be reduced by:
|
Irish Ltd companies are required to file financial statements. Nonetheless, depending on their size, they may be exempt from the audit requirement.
Establishing a Holding Company in Malta
The private limited company is the most common form for setting up a company in Malta. Shareholders and directors of Maltese companies may be individuals or legal entities of any residence. In addition, the company must have a secretary, who must be an individual of any residence.
Private companies in Malta are subject to a minimum share capital requirement (EUR 1,165), of which at least 20% must be paid up at the time of the company’s registration.
Information about the directors, shareholders, and secretaries of Maltese companies is publicly available. Access to the register of beneficial owners is granted to the competent authorities, as well as to persons who can demonstrate a legitimate interest in obtaining that information.
The following features of Malta’s tax regime are particularly relevant for holding companies:
| Tax | Rate and Its Application |
|---|---|
|
General corporate tax |
The standard rate is 35%, but the tax paid may be refunded. As a result, the effective tax rate may be reduced to 5%. Since 2025, an alternative tax mechanism has been available: a fixed rate of 15%, with no subsequent refund mechanism. |
|
Tax on dividends received by a Maltese company from its subsidiaries |
The general rate is 35% (with the possibility of a subsequent refund of the tax paid). The company may apply an exemption from tax where the participation exemption conditions are met (see below). |
|
Withholding tax on dividends paid to the holding company’s shareholders |
0% |
As a general rule, a Maltese company is treated as holding a qualifying participation where it holds at least 5% of the shares in the subsidiary (although alternative tests may also apply, for example, the right to be appointed to the subsidiary’s board of directors, or the size of the investment).
Once the qualifying participation threshold is met, at least one of the following additional conditions must be satisfied for dividends to qualify for the exemption:
- the subsidiary is incorporated or resident in the EU;
- less than 50% of its income consists of passive interest and royalties; or
- it is subject to tax at a rate of at least 15%.
If none of these conditions is met, the exemption may still apply where both of the following conditions are satisfied simultaneously:
- the subsidiary is not a portfolio investment company; and
- the subsidiary is subject to tax at a rate of at least 5%.
Malta has around 80 tax treaties in place.
Maltese companies are required to prepare and file financial statements. An exemption from the audit requirement is available only for small companies.
Key Considerations When Establishing a Holding Company
There is no universally “best” jurisdiction for an international holding company. The appropriate choice will always depend on the group’s structure, the composition of its shareholders, the nature of the underlying assets, and the profit distribution flows within the group.
The tax features outlined in this overview provide a starting point for comparing jurisdictions. However, they do not represent an exhaustive assessment of the overall tax burden associated with a particular holding structure. In addition to tax implications, account should also be taken of the applicable corporate law framework, ongoing compliance obligations associated with the functioning of the holding company (such as the preparation of consolidated financial statements), and the broader regulatory environment of the jurisdiction in which the holding company is established.
In any event, the decision to establish a holding company should be made only after a comprehensive assessment of the particular circumstances and relevant business objectives.
Tags: Company Formation
