Registering a holding company in Switzerland in the form of a GmbH / AG would be an optimal solution if you would like to manage or participate in the ownership of another company located elsewhere. This form of company ownership allows completing several important tasks. It can let you save on taxes, protect your assets, increase the profits of the companies that it holds, redistribute the dividends, and protect the confidentiality of the business owners in a more efficient way.
You have to realize, however, that registering a holding company in Switzerland that would cater to your business needs is not a simple affair. There are pros and contras that you have to weigh carefully before making the final decision. Otherwise, you may get yourself into hot water. For example, you have to be aware that holdings in Switzerland do not have the right to engage into real business. Taxes are quite high in the jurisdiction and the fiscal system is logical even though a bit complicated.
If you would like to register a holding company in Switzerland, please apply for the assistance of International Wealth experts. We will handle all the organizational issues, recommend the optimal Swiss canton and the most appropriate company structure, register the holding with the country’s authorities, open a business bank account, and calculate the taxes. Our corporate email address is info@offshore-pro.info and we are looking forward to hearing from you.
In the text below, you will find some compelling arguments why you should register a holding company in Switzerland and not in some other jurisdiction. It is possible to set up a holding in Cyprus, the Netherlands, Ireland, or Luxembourg, for example but Switzerland offers more stability, predictability, reliability, and legal protection. Besides, having a holding company in Switzerland would be a sign of your reputability as a businessperson.
Holding companies in Switzerland: basic information
The financial market in Switzerland is probably the best developed such market in the world and setting up a company that will manage the assets of other companies there should sound attractive indeed. Of course, the fact that holdings in Switzerland are prohibited from engaging in business independently imposes certain restrictions but these are not critical at all.
There are a few basic requirements that a Swiss-registered holding company must meet. These include the following ones:
- Other companies’ assets held shall constitute not less than 2/3 of the total worth of the holding assets/ profits.
- Minimum period of holding the assets of another company is one year.
- The share of another company’s ownership shall constitute not less than 10% or its worth shall constitute at least 1 million CHF.
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There is also some additional factors that you should take into account when deliberating registering a holding company in Switzerland:
- Some tax incentives that used to attract foreign investors (discounted capital tax and zero profit tax at the canton level) have been made obsolete since January 1, 2020.
- The profits of holdings registered in the canton of Zug (we will dwell on this Swiss canton below) are taxed at a lowered rate of 11.91%. This rate applies at all three levels of taxation: the federal, the cantonal, and the municipal.
- You will have a 50% discount on your Research and Development activities.
- Net profits obtained from certain sources (patents, related rights) is included in the tax base at a 90% discount.
- The taxation of dividends (qualifying holding) remains the same – 50%.
- Direct federal tax has increased by 10% to 70%.
Types of activities that Swiss-based holdings can be engaged in:
- Foreign asset management, capital management, intellectual property holding.
- Group management (‘cost-plus’ scheme for transfer pricing).
- Any commercial activities outside of Switzerland (including sale of intellectual property rights).
Please apply for our assistance in registering a holding company in Switzerland to avoid potential losses.
The canton of Zug
Theoretically, you can register a holding company in any of the Swiss cantons but Zug will serve this purpose best of all. The reason for that is the beneficial tax system found in the canton. This applies to both corporate and personal taxes. In the table below, the parentheses contain figures for 2018. If you find the minus sign (“–”), it means that no changes have occurred.
Tax rates in the Swiss cantons:
| Canton | Corporate tax rate | Personal tax rate |
| Lucerne | 12.32% (–) | 31.16% (31.17%) |
| Nidwalden | 12.66% (–) | 25.55% (–) |
| Obwalden | 12.74% (–) | 24.30% (–) |
| Appenzeller Alpenbitter | 13.04% (–) | 30.74% (30.48%) |
| Basel-Stadt | 13.04% (22.18%) | — |
| Vaud | 14% (21.37%) | — |
| Appenzell Innerrhoden | 14.16% (–) | 24.86% (–) |
| Zug | 14.35% (14.51%) | 22.38% (22.86%) |
| Uri | 14.92% (–) | 25.35% (–) |
| Schwyz | 15.02% (15.19%) | 27.53% (28.21%) |
| Neuchatel | 15.61% (–) | — |
| Glarus | 15.68% (15.70%) | 31.56% (–) |
| Schaffhausen | 15.82% (15.75%) | 31.89% (32.29%) |
| Grisons | 16.12% (–) | 32.18% (–) |
| Thurgau | 16.43% (–) | 32.48% (–) |
| Gallen | 17.40% (–) | 33.52% (–) |
| Aargau | 18.61% (–) | 34.38% (34.05%) |
| Fribourg | 19.86% (–) | 36.02% (–) |
| Jura | 20.53% (–) | 40.15% (40.46%) |
| Ticino | 20.55% (–) | 41.77% (40.72%) |
| Basel-Landschaft | 20.70% (–) | 42.17% (–) |
| Zurich | 21.15% (–) | 39.76% (–) |
| Solothurn | 21.38% (–) | 33.97% (34.18%) |
| Bern | 21.63% (21.64%) | 41.27% (–) |
| Valais | 21.74% (–) | 36.5% (–) |
| Geneva | 24.16% (–) | 44.75% (–) |
As you can clearly see, the canton of Zug has the lowest corporate and personal tax rates. At the same time, other Swiss canons may suit other business purposes better so please apply for a consolation to International Wealth experts if you are thinking of setting up some sort of company in Switzerland.
General advantages of registering a holding company in Switzerland
Even if we disregard the differences between different Swiss cantons, we will find several weighty advantages that Switzerland offers for registering a holding company there. Please note that here we are speaking about registering a holding in the country, not about setting up a company with a different corporate structure. So, here is what you will find when you register a holding company in Switzerland:
- It is an ideal solution for investors who would like to be majority stakeholders.
- Federal tax cuts.
- Cantonal tax cuts in some Swiss cantons.
- Simplified qualification requirements for companies that want to do business in the form of holdings.
- Double taxation avoidance agreements are applicable, which lowers the amount of taxes payable.
- Dividends payable to Swiss-based companies from an EU country are tax-exempt.
- The holding company registration conditions are transparent in Switzerland.
- Total exemption from dividend/ profit tax is possible to obtain.
- You can choose the canton that fits your business purposes best.
- Multiple tax incentives are available.
- A holding company registered in Switzerland will bring you exceptional reputational advantages and put you high in the international business world.
- Switzerland boasts a stable political, economic, and financial situation and the banking services found in the country are of superb quality.
Please read about other products and services in Switzerland that International Wealth portal offers
Comparative advantages of registering a holding company in Switzerland
Of course, you can register a holding company in other European countries such as the Netherlands, Cyprus, Luxembourg or Ireland, for instance. Probably, you can find some lucrative conditions there too but no jurisdiction enjoys so much international respect as Switzerland does. In any case, an individual consultation with our experts will allow dotting all the i’s and finding the solution that is going to be optimal in our personal case.
The table below compares the conditions to be found in Switzerland and in the national states mentioned above when registering a holding company there. The asterisk (*) means that certain special conditions apply:
| Criterion | Switzerland | Netherlands/ Cyprus/ Luxembourg/ Ireland |
| Participation Exemption | ||
| Dividends | yes | yes / yes / yes / yes* |
| Capital gains | yes | yes / yes / yes / yes |
| Passive income | yes* | yes / no* / no / no |
| Qualifying Requirements for Dividend Exemption | ||
| % of ownership | 10% or 1 mln CHF | 5% / no / 10% (1,2 mln EUR) / 5% |
| Required holding company lifetime | no | no / no / 1 year / no |
| Capital Gains Exemption | ||
| % of ownership | 10% or 2 mln CHF | 5% / no / 10% (6 mln EUR) / 5% |
| Required holding company lifetime | 1 year | no / no / 1 year / 1 year |
| Permissible Deductions | ||
| Capital losses | + | no* / yes / yes / yes* |
| Costs of interest | + | yes* / yes / yes / yes |
| Withholding Taxes Dividends) | ||
| Class rate (tax agreement signed) | 35% | 15% / no / 15%* / 20% |
| Minimal rate outside UE | 0% | 0% / no / 0% / 0% |
Some additional information for comparison:
| Criterion | Switzerland | Netherlands/ Cyprus/ Luxembourg/ Ireland |
| Taxes on subsidiary foreign company | no | no* / no* / no* / yes |
| Holding company corporate tax | 7.8%* | 25%* / 10%* / 29.8%* / up to 25% |
| Capital tax | 1%* | no / no / no / no |
| Stamp duty / transfer tax | no* | no* / no* / no* / no |
| Maximum permissible own-borrowed capital ratio | 7:3 | 3:1 / no / 6:1 / no |
| Connection of the holding company to the CFC regulations | no | no / no / no / no |
| Opportunities for Advance rulings | yes | yes / yes / yes / yes |
| EU Parent Exemption) | yes | yes / yes / yes / yes |
| Minimal share of ownership | 25% | 5% / no / 10% (1.2 mln EUR) / 5% |
| Minimal permissible holding company lifetime | 2 years | 2 years / no / 1 year / no |
| Liquidation outside the EU * | 35% | 15% / no / no / no |
| Interest rate * | no | no / no / no* / no |
| Royalties * | 0% | no / no / up to 12% / 20%* |
| Number of countries what have made double taxation avoidance agreements with the jurisdiction | 80 | 92 / 34 / 64 / 63 |
Registering a holding company in Switzerland looked like an attractive option even in the times when it was possible to hide your assets in a ‘banana republic’. Now when the de-offshorization process is in full swing, this opportunity has become even more valuable.
We will be happy to provide assistance to you in all aspects of registering a holding company in Switzerland: company registration proper, corporate bank account, economic substance, tax optimization, accounting, audit, and so on. If you have some special requirements that your prospective holding company has to meet, please apply for a personal consultation by sending us an email or using the live chat. We will be pleased to answer all your questions.
Why should I prefer Switzerland when registering a holding company in Europe?
Switzerland has one of the most stable economies in the world and it offers really attractive conditions for setting up a holding company there. However, each individual case needs individual consideration and you may want to learn what offers other European state make before opting for Switzerland.
What canton should I choose for my Swiss-registered holding company?
The canton of Zug looks most inviting to foreign entrepreneurs who want to register holding companies in Switzerland. At the same time, your personal business purposes may make it more reasonable to register a holding company in some other Swiss cantons.
Will I be able to open a bank account for my Swiss-registered holding company?
Yes, you will, without any doubt. Switzerland is famous all around the world for its banking services and we closely cooperate with a number of Swiss banks so, with our assistance, opening a bank account for your Swiss-registered holding company is not going to be a problem at all.
