Offshore / Articles / How to open a holding company: what it is, constitution, types and costs
What is a holding company? Let’s find out what are the characteristics of this corporate form, advantages and disadvantages, where to incorporate and how to start the incorporation procedure.
Holding company | Standard company | |
Legal structure | It owns the majority of stock in one or more subsidiaries, providing limited liability protection to its shareholders. | Independent legal entity operating in a specific sector or market and which is responsible for its debts and liabilities. |
Diversification | Designed to diversify its businesses by investing in multiple subsidiaries operating in different industries, markets and geographies. This ensures greater flexibility and resilience to the group as a whole. | It typically focuses on a specific product, service, or market. |
Consolidated financial information | It can consolidate the financial relationships of its subsidiaries, providing a complete view of the overall performance of the group. This can help identify areas of strength and weakness and support decision making for future investments or divestments. | Responsible for own financial reporting and does not have access to the same level of consolidated information |
Tax efficiency | The structure of a holding company can offer tax advantages, such as the ability to offset profits and losses between subsidiaries, and thus benefit from tax incentives in different countries. | Subject to the tax laws of the country or region in which it operates. |
Access to capital | It can provide easier access to capital for its subsidiaries by leveraging its reputation, financial strength and existing relationships with lenders or investors. |
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