Subsidiary company + holding
Subsidiary company + holding
We can set up your subsidiary in France, Scotland or Ireland, wholly or partly owned by your English holding company.
This model has several advantages:
– France: having a presence in France, which is mandatory for the majority of activities on French territory,
– adopt the principle of a BtoB tax exemption (UK International Holding) on professional dividends paid to your English holding company (see page on creating a holding company)*,
– avoid losing your customers for good,
– give a second life to your business,
– reinvigorate your business.
Why set up a subsidiary for your holding company?
A subsidiary in France will enable you to justify your activity to the French tax authorities.
Having a subsidiary in France will also enable you to pay VAT and, if you have employees, to pay salaries and social security contributions.
What’s more, having a subsidiary in France can enable you to pay dividends to your London holding company, which in turn can benefit from an exemption (up to -95%) on its professional dividends*.
In order for the London holding company to claim rights over the subsidiary, it will obviously need to own shares in the subsidiary (minimum 10%).
– As a result, profits made by companies headquartered in France in businesses operating abroad are not subject to French tax, even if the accounting for these businesses is centralized in France.
– …French companies can avoid corporate income tax, not only on profits from an establishment located abroad,…”
– Hague Convention – 1992 – Decree 92-521 “Any natural or legal person resident in the European Community has the right to set up a company in the country of his choice without having to be resident there for tax purposes”.
– “Dividends received by a UK company will generally be exempt from corporation tax. This applies to dividends received from non-UK companies.”
https://www.eaiinternational.org/public_files/prodyn_img/royaume-uni.pdf
– In the event that dividends are paid by a French company to a British company which holds, directly or indirectly, at least 10% of the capital of the French company, no withholding tax will be due in France in application of the agreement.
*You must pay taxes in your country of tax residence.
(1) Please note: we do not give any advice, in particular tax advice, on cross-border TUP and or the creation of an extra-territorial company; you should seek advice from a tax lawyer before ordering a TUP or extra-territorial company from us. A cross-border TUP must be justified by an economic interest: a valid reason for tupping; you cannot organize your insolvency or transfer assets and liabilities without consideration. The company to which you transfer your company’s assets must have an economic reason for absorbing your company: similar activities, holding (management, financing), pooling of operating costs, human resources, infrastructure (movable (offices), real estate), clientele, added value, know-how, customer relations, intellectual property, etc. The creation of an offshore company remains your property if you are the beneficial owner: you are accountable to the authorities in your country of tax residence, even if you own only part of the offshore company. For cross-border TUPs, the cost of the legal announcement (around €290 excl. VAT) is added to the cost of the procedure (€890 excl. VAT); if you don’t have a holding company, allow an extra €790 excl. VAT for its creation.
We do not draw up private deeds: you will fill in a form which will generate the specific documents. These documents have been validated several times by a lawyer, and have enabled us to carry out several successful cross-border TUPs before the competent courts. To register a TUP online, you will be asked to pay an additional fee of €490 (excl. VAT).