A company which holds shares of another company or many companies (subsidiaries). Often referred to as a parent company. It can also own real estate or other property. A holding company, if from the appropriate jurisdiction, may lower or completely eliminate withholding tax on incoming and outgoing dividends as well as capital gains.


  • 0% tax on incoming dividends

Exemption of Corporate Income Tax on incoming dividends from subsidiary companies is available in many European jurisdictions.

  • 0% tax on outgoing dividends

0% withholding tax on outgoing dividends paid out from the holding company to shareholders (non-resident individuals or non-resident companies).

  • Confidentiality of beneficial owner

Offshore companies, trusts and foundations are often used for this purpose. Prestigious EU jurisdictions can establish confidential trust companies for inheritance and non-disclosure purposes.

  • 0% capital gains tax on sale of shares

Capital gains tax on sale of shares is exempted in many European jurisdictions.

How it works?

In order to apply Double Tax Treaties or EU Parent Subsidiary Directive to lower or eliminate tax on dividends, the holding company must

  • Be a tax resident company (must be able to present a tax resident certificate)
  • follow requirements of the participation exemption (if such exist) imposed by the holding jurisdiction on
  • minimum period of ownership, minimum % shares on ownership
  • level of corporate income tax in the jurisdiction of the subsidiary (tax test)

  • To find out more, please contact us.

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