Holding company: what is it?

Definition of patrimonial society 

A holding company is a type of legal entity created for the purpose of not carrying out a traditional economic activity, but rather preserving and increasing assets. It primarily focuses on the management of real estate, securities, and investments.

Main characteristics of holding companies

Let’s examine the main characteristics of holding companies. They include:

• The company does not carry out commercial activities; it does not sell goods or provide services;
• According to  section 5, paragraph 2 of the Corporate Tax Act , half of its assets are not intended for commercial activities;
• The main assets are real estate, securities and investments;
• The company’s primary objective is to australia email list  preserve and grow assets;
• Possibility of taking advantage of tax benefits.

Differences between a holding company and a holding company

The holding company is often considered together with the holding company. However, they have significant differences, presented in the table below.Types of assets that can be managed by a holding companyA differences between ux and ui holding company can manage different types of assets, including:

• Financial assets: Monetary funds or contractual rights to receive monetary funds or other financial assets from another entity. Includes investments, bonds and stocks;
• Real estate assets:  Physical properties that have significant facebook users value and are used for housing, work, production, or as investments. This includes real estate and land;
• Other assets:  These cover a wide range of items that may have telemarketing forum  Telemarketing Forum value and generate income, mainly jewelry, works of art and collectible vehicles.

Advantages of creating a holding company

By creating a holding company, you can take advantage of several benefits, including:

• Family asset protection:  Such a company allows to protect family assets from various risks. Using assets in a legal entity provides an additional layer of protection, separating personal assets from company assets;
• Succession and inheritance planning: facilitates the process of transferring property to the next generations. They allow the succession to be organized in such a way that fiscal and legal obstacles are minimized;
• Fiscal and tax optimization:  Asset management companies can employ different strategies to optimize taxes, including tax deductions to reduce the total tax burden.

How to create a holding company

To set up a holding company, it is necessary to comply with legal obligations. First, you must decide on the type of company, which can be a Limited Company (SL) or a Public Limited Company (SA). The choice will depend on the size of the business.

Then, the main steps must be followed:

1. Prepare the articles of incorporation: this includes the company’s bylaws, founding agreement and appointment of directors. The document must be certified by a notary;
2. Registering the company: this involves filing the incorporation documents and paying the corresponding fees at the  Commercial Registry ;
3. Obtaining the NIF: previously it was necessary to obtain the CIF from the  Tax Agency , but since January 1, 2008, the CIF was abolished and now the NIF (Tax Identification Number) is used for tax purposes for both individuals and corporations;
4. Deposit the share capital: if necessary, deposit the share capital into the corporate account;
5. Register with the tax office and social organizations: this is necessary for the payment of corporate tax and VAT, and for the payment of employee contributions, if any;
6. Obtaining necessary licenses: You may need to obtain special licenses or permits from local authorities.

Please note that quality legal and tax advice is essential to successfully creating and managing a holding company in Spain. This may include assistance in developing the company’s articles of association and other constitutive documents, as well as advice on issues relating to corporate governance, estate administration and contractual implications. It is also advisable to consult information on current corporate taxes and tax effects, including payment of corporate tax, VAT, property tax and other applicable taxes.

Examples of successful asset management companies

Typically, examples of how families or individuals use holding companies are kept private due to their desire to maintain confidentiality. Therefore, we will provide fictitious examples.

Example 1: Family property management

The Gonzalez family owns several properties. To simplify management, property ownership, tax planning and asset protection, they decide to create a holding company. The company is managed by family members, who are also actively involved in developing rental and property maintenance strategies.

Thanks to this, the Gonzalez family benefits from advantages in the transfer of property rights within the family and optimizes taxes on rental income from real estate. It also helps them simplify the management of all properties and protect them from legal claims.