The purpose of a holding company is to act as an intermediary between the shareholders and the company by appointing a third party in order to make long-term holding and management investments possible, and to therefore be in a position to take advantage of substantial tax benefits.
How does it work?
Companies whose primary legal purpose is to manage sustainable investments, and who have no business within Switzerland, are classed as Cantonal holding companies whereby any such holdings or income represents at least two thirds of their total assets or revenue. The benefit in capital coming from participations also forms part of the income of the participations.
Taxation of holding companies
Cantonal and municipal taxes
If the conditions mentioned above are met, then the company shall not pay any Cantonal and municipal tax based on its income. This particularly means that all of its income (equity returns, capital gains, interest, gains on foreign exchanges, royalties, management subsidiary fees, etc.) are exempt from both Cantonal and municipal taxes on the income.
Federal income tax
Holding companies with significant holdings (in excess of 20% or worth over CHF 2 million) are exempt from all federal taxes. *From 2011 – investments of over 10%, or CHF 1 million.
AZFH is able to provide you with all of these services, and will be able to support you throughout the entire life of your business.