Switzerland has always been a popular location for those looking to conduct their business affairs. Switzerland is considered to be an open society and offers many benefits to those who run existing companies elsewhere.
If you’re interested in finding out how operating within Switzerland under a holding company could benefit you, keep reading to learn more.
The draw to Switzerland is considerable and for good reason when you explore the advantages. International business like to conduct their affairs from Switzerland due to:
- A level of political stability that is rarely seen within other States. A constant political environment is key to any large business or company surviving as disruption and conflict can make running a business difficult.
- Of course, Switzerland is also known for the many fiscal advantages it offers to both residents and corporations alike.
- The access to a highly skilled and multilingual workforce is also a large attraction which shouldn’t be overlooked.
- The access to business support structures and services that can make the operation of any large corporation more straightforward. The support available includes legal professionals and accountancy services which go hand in hand with big business.
- Switzerland is located in the centre of Western Europe making it a great business hub with many prominent locations easily accessible. In addition, the time zone is considered to be friendly, allowing same day communication with Africa, the US and parts of Asia.
The biggest benefit that most people will cite is the efficiency of conducting your tax affairs within Switzerland. A Swiss holding company is an increasingly popular way to fulfil your tax obligations under law whilst still operating in a competitive environment. Several tax concessions or exemptions can be granted when certain criteria are met.
- Cantonal tax exemption which means that no income tax is levied at the cantonal level. This translates to a tax exemption for income derived from dividends, interest, management fees and royalties.
- Federal tax concessions which apply to income tax at the federal level which usually consist of a rate of 7.83%. Dividend income derived from capital gains will usually see a complete tax exemption of this rate.
The key to obtaining these tax exemptions is making sure that your holding company holds more than two thirds of its assets and investments in a foreign company. Holding companies can also benefit from numerous double taxation treaties which the Swiss authorities are a signatory to. This in itself can go a long way to ensure that you’re only paying tax in one jurisdiction and at the lowest rate possible.
Forming Your Holding Company
We would suggest seeking expert advice. Tax matters can be a complicated affair which is why a personalised consultation is always a good idea for those with business interests that could stand to gain from tax exemption.
There are also service providers out there who will take on the day to day administration tasks of your holding company, leaving you to concentrate on the business it represents.