Being different from corporations and trying not to be like big corporations discourages family businesses from establishing their own family-holdings structures. However, the establishment of a family holding company brings significant advantages to family businesses. The main function of the family holding company is to keep the family’s assets together and protect them. The Holding structure also brings tax advantages.
Why not be afraid of the holding structure?
Ownership of a family business through the holding structure represents nothing more than the insertion of an intermediate link in the ownership in the form of an additional Limited liability company (s. r. o.) / Joint stock company (a. s.), through which you can own your company. If you repay dividends from your company as an individual, you are taxed at best with a 7 % withholding tax, if you repay dividends from your company as a legal entity (through a holding company), it is possible that you can avoid taxation completely. When you are selling a company as an individual, effective taxation can approach up to 25 %, and 14 % health insurance contribution must also be added to that. When you are selling a company as a legal entity (through a holding company), it is possible to avoid taxation completely. If you would like to know more about other holding structure advantages, do not hesitate to contact us.