Most trusted place to setup company in Europe?

[PhantomOf ThePits]

Based on the information discussed, here are two solid options which I consider the best for establishing a holding company in Europe:

1. UK Holding Company
   If you're not a UK tax resident and are comfortable with the UK's status outside the EU, setting up a UK holding entity is top. Key benefits include:
   • 0% taxation on any ownership under the ltd company over 5%
   • 0% withholding tax on dividends paid to non-residents, allowing for tax-free repatriation of profits.
   • A straightforward process for distributing dividends or dissolving the company to access its assets.
   • Low maintenance costs and a strong reputation as a jurisdiction for holding companies.
2. Luxembourg Société de Gestion de Patrimoine Familial (SPF)
   Designed specifically for private wealth management (e.g., holding activities), the Luxembourg SPF offers:
   • 0.25% tax with a maximum of €125K. Over that, it's 0%.
   • It cannot have commercial / trading activity and is restricted to only holding/managing assets. This is, in practice, very flexible, as certain management fees can qualify as "managing assets" and, therefore, inclusive.

Both structures are designed to minimize scrutiny from tax authorities (p.e. Spain ETVE/holding is not ideal despite 1.25% taxation) and take advantage of the robust double tax treaties available in the UK and Luxembourg. Each has unique advantages depending on your specific circumstances and requirements.

I hope this provides some useful guidance!

excellent @nurredon thank you.

One question:
If the ownership of the investment target is less than 5% (imagine you'd use that structure to invest in many startups), then normal corp tax applies?

Cyprus Holdings (less reputable than above) seem to have 0% tax on their investments when used as a private investment company (yearly running costs including audit, director, secretary around 3-4k EUR).
I often had friends who are residents outside EU asking me about it as they were looking for a corp structure through which they can channel their startup investments without having to pay high yearly running fees or big taxes on potential exits).

 

[undercover]

Based on the information discussed, here are two solid options which I consider the best for establishing a holding company in Europe:

1. UK Holding Company
   If you're not a UK tax resident and are comfortable with the UK's status outside the EU, setting up a UK holding entity is top. Key benefits include:
   • 0% taxation on any ownership under the ltd company over 5%
   • 0% withholding tax on dividends paid to non-residents, allowing for tax-free repatriation of profits.
   • A straightforward process for distributing dividends or dissolving the company to access its assets.
   • Low maintenance costs and a strong reputation as a jurisdiction for holding companies.
2. Luxembourg Société de Gestion de Patrimoine Familial (SPF)
   Designed specifically for private wealth management (e.g., holding activities), the Luxembourg SPF offers:
   • 0.25% tax with a maximum of €125K. Over that, it's 0%.
   • It cannot have commercial / trading activity and is restricted to only holding/managing assets. This is, in practice, very flexible, as certain management fees can qualify as "managing assets" and, therefore, inclusive.

Both structures are designed to minimize scrutiny from tax authorities (p.e. Spain ETVE/holding is not ideal despite 1.25% taxation) and take advantage of the robust double tax treaties available in the UK and Luxembourg. Each has unique advantages depending on your specific circumstances and requirements.

I hope this provides some useful guidance!

Some standard stuff from ChatGPT - you need to read OP's thread again!

But you don't need to worry; he's playing in a completely different league than you are.

 

[daniels27]

Some standard stuff from ChatGPT - you need to read OP's thread again!

But you don't need to worry; he's playing in a completely different league than you are.

Why are people wasting my time with ChatGPT stuff? Are you not able to write the nullshit yourself?

 

[nurredon]

I wrote it. Grammarly (not even ChatGPT) just corrected my typos. The info is legit, and those are the best holdings of this kind in Europe

 

[bizman]

I wrote it. Grammarly (not even ChatGPT) just corrected my typos. The info is legit, and those are the best holdings of this kind in Europe

You’re just making noise, nothing else. Have you even read what the OP is asking and his conclusion?

 

[bubbledouble]

It is not a significant budget considering the total revenue and the corporate structure, which is classified as moderately complex. For a small business, however, it might understandably seem like a substantial amount.

For the sake of clarity and to conclude this discussion, we opted for Switzerland with a Luxembourg parent company as the holding entity. Based on our calculations and the conclusions drawn by our financial strategists, this approach represents a solution that meets the conditions we set for our business while ensuring we maintain credibility with our customers and business partners.

yeah I understand, whish I owned a business like yours.

 

[JustAnotherNomad]

For the sake of clarity and to conclude this discussion, we opted for Switzerland with a Luxembourg parent company as the holding entity. Based on our calculations and the conclusions drawn by our financial strategists, this approach represents a solution that meets the conditions we set for our business while ensuring we maintain credibility with our customers and business partners.

What did your advisors tell you how much substance you will need in Luxembourg for the Swiss tax authority to drop the WHT?

 

[daniels27]

What did your advisors tell you how much substance you will need in Luxembourg for the Swiss tax authority to drop the WHT?

I heard, actually quite a lot.

 

[JustAnotherNomad]

Hence my question. I'm sure he'll get very good advice, so it would be nice to learn more about this.

 

[daniels27]

You need to install QDF Software and then fill out form 823 or 23B. They then need to be printed and stamped by the Luxemburg tax office. Then, you submit them with the Swiss ESTV and they will then check how much they want to check. But generally, anything that smells like nullshit is treated accordingly. Of course, if you run a business alone and live in Luxemburg for most time of the year, they will accept it. But if you run big companies and have a shared office there where nobody sits there, be prepared for troubles.

 

[SCHLOSSFINANZ]

and to add it takes 6-9 months to be processed by ESTV normally. Directly go with Swiss Corp. and Liechtenstein HoldCo

 

[JustAnotherNomad]

and to add it takes 6-9 months to be processed by ESTV normally. Directly go with Swiss Corp. and Liechtenstein HoldCo

With Liechtenstein HoldCo's they don't care about substance?

 

[SCHLOSSFINANZ]

you can rule with ESTV that dividends to Liechtenstein HoldCo will be excempt for years in advance. Also Liechtenstein setup is cheaper than Luxembourg. No witholding tax in Liechtenstein as well. Liechtenstein has DTA with Monaco so its zero tax then.

 

[JustAnotherNomad]

Can't you get the same advance ruling for a LU holdco?
I'm just asking about the Swiss side. I'm just really curious.
Why would the Swiss tax authority be less strict with a LI holdco than with a LU holdco? In both cases, they would give up the WHT, so it's not very logical to me. Do they assume that the LI authorities will be stricter/do some of the enforcement for them?