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Taxation of Holding Companies in Switzerland
Updated on Wednesday 29th August 2018 Rate this article
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A holding company registered in Switzerland is set up in order to hold participation rights in other companies. As stated by the Swiss Tax Law, this type of company is not allowed to enter any commercial activities in this country and it is generally registered as joint stock company or limited liability company. In order to open a company in Switzerland as a holding company, special conditions have to be fulfilled and it is important to know that this business form can benefit from certain tax deductions and exemptions, which can vary depending on the canton in which they are set up. Our team of specialists in company formation in Switzerland can advise on the main tax benefits available for this business structure.
Taxation of Swiss holding companies in the canton of Zug
Zug, one of the Swiss cantons, provides some of the best tax conditions for the registration of a holding company. In this sense, it is important to know that this canton is the preferred business destination in Switzerland for a holding company (1 in 4 holding companies in this country are set up in Zug) due to the following tax conditions:
- • if specific conditions are met, the holding company can benefit from an exemption on the cantonal tax;
- • the corporate tax applicable at a federal level is imposed at a rate of 8,5%;
- • the business form can also benefit from an exemption on income or gains deriving from qualifying participations;
- • if the company performs investments in the real estate sector, it can qualify under the privileges provided by the double tax treaties signed by Switzerland.
Conditions for obtaining tax exemptions of the Swiss cantonal tax
As mentioned above, the Swiss holding company can benefit from an exemption on the Swiss cantonal tax and our team of specialists in company registration in Switzerland can offer advice on the qualification requirements. One of the main aspects that have to be fulfilled refers to the company’s articles of association, which have to prescribe that the business will have as a main activity the management of equity investments on a long-term basis.
The company may enter only in specific business activities, such as holding and/or exploitation of intellectual property, debt financing or subsidies and others. Investors are invited to contact our team of consultants in company formation in Switzerland for more details regarding the activities of a holding company, as well as on other tax benefits it can obtain in a certain Swiss canton.
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