Holding Company
Traditionally, the scope and nature of a holding company was to hold shares in other companies and create a group structure to optimize the internal organization. These days, offshore holding companies can also identify as parent companies, asset holders or financial holding companies with particular legal designations. As such, intellectual property rights and trade secrets are often protected against actions taken towards the operating company.
The primary reason to set up a holding company with subsidiaries lies in risk management to limit liabilities. A holding company holds shares and voting rights in other companies and thus can appoint and remove members on the board of directors. In group structures, holding companies employ professional directors. In a group structure, these directors must act in good faith to promote the success of the companies as separate legal entities with its own separate creditors and whose interests are distinct from the interests of other companies in the group.
Holdings companies are legal persons with limited liability that hold share in subsidiaries. As a general rule, legal persons with limited liability separate the legal entity from its shareholders and controlling persons. This same principle applies to offshore holding companies. Although a holding company can be part of a group of legal persons, each entity and its shareholders are considered a stand alone entity. As such there must be compelling reasons for a court to pierce the corporate veil and impose liability on other companies in the group and the natural persons involved.
In the international world of finance, holding companies can be used to rent safety deposit boxes with financial institutions. Privacy protection and furthered anonymity is strengthened by the use of an offshore holding company as a contract party for the vault. Banks and other financial institutions will only allow third party access under a power of attorney that is available in the bank and a letter of wishes confirmed by the corporate resolution.
Anguilla Holding Company
Anguilla company law is based on common law principles and is codified in the International Business Companies Act, the Companies act and the Limited Liability Companies Act. The Companies Act allows Anguilla offshore companies to hold shares in subsidiaries and thus form a group of companies. Anguilla holding companies can qualify as offshore companies or International Business Corporations. Consequently, they may receive a beneficial corporate tax exempt status.
Identical to all other offshore financial centers, subsidiaries of Anguilla holding companies registered in high tax jurisdictions cooperate and comply with common reporting standards and regulation such as DAC6 for EU member states. Therefore, not all transfers from the subsidiary to the holding company can be tax deductible in the books of the subsidiary.
Operating a holding company comes with responsibilities. Anguilla holding companies serve three distinct purposes. These are ownership, control and protection, and tax optimization. To comply with all the rules and maintain an Anguilla holding company, Legal Floris LLC and Equation CS help you through the process. For further information and to discuss the possibilities of Anguilla for your plans, feel free to complete the contact form below. Our representatives come back with you shortly.
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