Holding Company

This structure facilitates the disposal of company shares by the parent company without triggering a chargeable gain on disposal. The main purpose of a holding company is simply to hold the other companies. Company law is more flexible in allowing transactions between companies that are subsidiaries of a single holding company. Here are some advantages:

 

  • Many restrictive company laws preventing companies making and receiving loans do not apply where the loans are to or from companies owned by a single holding company, this is useful for financing and transferring funds.

  • Surplus profits can be taken out of subsidiary companies and parked in holding companies pending reinvestment.

  • Trading subsidiaries can usually be sold free of capital gains tax. There is an exemption from tax on capital gains on the disposal of qualifying shareholdings in other companies by an Irish company.

  • A foreign tax credit system ensures dividends received by an Irish company from its foreign subsidiaries are not subject to any significant Irish taxation, indeed with no liability in most cases.

  • There is an exemption from Irish dividend withholding tax on the payment of dividends by Irish companies providing the necessary conditions are satisfied.

  • There is no Thin Capitalisation or Controlled Foreign Company (“CFC”) legislation in Ireland.