Coddan CPM LTD - specialists in United Kingdom, Scottish and Irish Holding business start up advice, resources and solutions. With Coddan your business start up idea can literally become a reality in hours! We offer everything a business incorporation or growing business needs right from free advice through to electronic Holding company formation & Holdings company registration, Irish company formation, Scottish company creation, business stationery/business cards, website templates, domain registration, compliance software, virtual offices, accountancy, financial services, trademark registration, marketing, e-commerce plus much more.
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British Holding company formations should be quick and painless - whether you are an accountant for whom company start-up is a frequent activity or an individual ordering your first Holding company registration. We were the first incorporation agent in the world to offer a complete online UK Holding company incorporations service and we continue to refine our ordering system, which has been widely praised for ease of use. If you want to become familiar with the description and the contents of limited companies filing packages, offered by Coddan CPM LTD and to find above, what kind of service is included in this or that British companies registration package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the company incorporation within United Kingdom, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.
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Holding Company is a company that usually confines its activities to owning stock in and supervising management of other companies. A holding company usually owns a controlling interest in the companies whose stock it holds. In order for a corporation to gain the benefits of tax consolidation, including tax-free dividends and the ability to share operating losses, the holding company must own 80% or more of the voting stock of the company. A company may own one or more other companies which are its subsidiaries. The relationship between parent and subsidiary depends on majority control of the voting rights of shares or the ability to appoint the majority of directors. The precise definition of a holding company is in section 736 of the Companies Act 1985. In June 2002 the UK government introduced a capital gains tax exemption for UK companies with substantial shareholdings in another company. The new rules have now been clarified and apply to UK registered companies, foreign registered companies resident in the UK for tax purposes, as well as UK branches of companies registered outside the UK. If you want to become familiar with the description and the contents of UK holding companies formation packages, offered by Coddan CPM LTD and to find above, what kind of service is included in this or that holding companies incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the holding company registration within United Kingdom, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.
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UK holding companies as companies the purpose of which consists exclusively or primly in the administration of assets or in participation in or the permanent administration of interest in other enterprises. A standard limited company may be used as a holding company of any kind of entity anywhere in the world. Such a structure enhances the owner's privacy, facilitates ultimate sale of the underlying business and may have other practical benefits in the course of day-to-day operations. For example, the holding company could be used to provide loans to subsidiaries in various countries, on which the subsidiaries may obtain the benefit of tax deductions on interest paid.
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The English or Scottish holding company of overseas subsidiary companies already performs creditably as an international holding company. Consider the following: the United Kingdom has the widest network of double tax treaties in the world, and is also a signatory to the EU Parent / Subsidiary Directive. Given the quality and extent of the UK's tax treaty network, it is arguably the best performer in the important discipline of extracting overseas dividends at the minimum tax cost. Whilst the United Kingdom offers no exemption from UK corporation tax on foreign income dividends, it grants double tax relief by way of a credit for foreign corporation tax underlying the dividends provided that the company holds, directly or indirectly, at least 10% of the share capital of the company from whom the tax credit is claimed. Where the underlying foreign corporate tax rate is 30% or more, then the credit will normally be a complete relief from UK corporation tax - and therefore as good as an exemption. It is significant that the UK has lower rates of corporation tax than most other industrial nations. The United Kingdom is remarkable in not imposing any withholding tax on dividends distributed by companies to UK non-resident shareholders. It therefore outperforms the other leading holding company locations in this regard.
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The investing company must be a qualifying trading company or a qualifying holding company throughout the period beginning with the start of the last twelve month period in which the substantial shareholding condition is met and ending at the time of the disposal and also immediately after the disposal. The definition of a qualifying trading company is one which does not carry on to any substantial extent non-trading activities such as holding intellectual property and ownership of land or assets as investments. A qualifying holding company is one which together with its 51% subsidiaries does not carry on to any substantial extent non-trading activities.
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This is our most popular package with overseas residents, and includes: -
£1,000 authorised shared capital, a minimum of one share may be issued
Holding company registration online in UK 6-8 workday hours
Payment of UK legal and initiation fees
Annual Return and Annual Account reminder
A registered office address for 12 months, provided by Coddan
Renewal application of following year's fees of Registered Address
Company secretarial service for 12 months
Coddan provides a company nominee director service for 1 year
The name of the nominee director & secretary will appear as a public record
The following two hard bound copies of corporate documents will be posted to you (Note: these documents are sent to you through Royal Mail Service, and are to be completed upon arrival): -
The original laminated Certificate of Incorporation;
A hard bound copy of the Memorandum and Articles of Association;
A hard bound copy of the Minutes of the First Directors' Meeting;
Two printed share certificates and Company Register;
A pre-signed, undated letter of resignation from the nominee director;
A General Power of Attorney signed by nominee director;
An indemnity Letter for General Power of Attorney;
A nominee service agreement which provides for the indemnification of the nominees.
This is our most popular package with UK residents, and includes:
Submission of applications that details company's executive officers (£1,000 authorised shared capital, a minimum of one share may be issued);
Holding company formation is usually achieved within 6-8 workday hours (Companies House permitting);
Payment of UK legal and initiation fees;
The appointment of your own candidates as directors and secretary (a minimum of two people are required).
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company:
A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires PDF file reader);
Minutes of the First Meeting of Directors (requires PDF file reader);
Share Certificates and company Register.
This is our most popular package with EU residents, and includes
Submission of applications that details company's executive officers (£1,000 authorised shared capital, a minimum of one share may be issued);
Holding company registration is usually achieved within 6-8 workday hours (Companies House permitting);
Payment of UK legal and initiation fees;
The appointment of your own candidates as directors and secretary (a minimum of two people are required);
Annual Return and Annual Account reminder
A registered office address for 12 months, provided by Coddan
An application form for the following year's renewal of the Registered Office Address service (£50.00)
The following documents will be e-mailed to you (Note: these documents are to be printed and signed):
A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires PDF file reader);
Minutes of the First Meeting of Directors (requires PDF file reader);
Share Certificates and company Register.
This is our most popular package with small business, and includes: -
Submission of applications that details company's executive officers (£1,000 authorised shared capital, a minimum of one share may be issued);
Holding company registration is usually achieved within 6-8 workday hours (Companies House permitting);
Payment of UK legal and initiation fees;
Applicant appointment of director for company (appointed electronically);
Annual Return and Annual Account reminder
A registered office address for 12 months, provided by Coddan;
An application form for the following year's renewal of the Registered Office Address service (£50.00);
Nominee company secretarial service for 12 months (next year - £49.95).
The following documents will be posted to you (these documents will be sent via Royal Mail): -
The original laminated Certificate of Incorporation;
A hard bound copy of the Memorandum and Articles of Association;
A hard bound copy of the Minutes of the First Directors' Meeting;
Two printed share certificates and Company Register.
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What Does Holding Company Mean? Definition & Meaning for Holding Company
. A holding company provides a means of concentrating control of several companies with a minimum of investment; other means of gaining control, such as mergers or consolidations, are more complicated legally and more expensive. A holding company can reap the benefits of a subsidiary's goodwill and reputation while limiting its liability to the proportion of the subsidiary's stock that it owns. The parent company in a conglomerate corporation is usually a holding company.
Strictly speaking, the term "holding company" might be used to describe any company that owns a majority of shares in another company however this may only apply if that corporation's only reason for existence is to hold stock in other companies. Usually, though, the term signifies a company which does not produce goods or services itself, but, rather, whose only purpose is owning shares of other companies (or owning other companies outright). Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies. The owned companies may be: subsidiary companies - the holding company owns more than 50% thus giving control. Associated companies - the parent company owns 20-50%. This is a large shareholding should provide considerable influence (but not control) over the associated company. How much influence will depend on ownership of the other shares? Owning 49% and wanting control when a rival company has a 51% stake may be a less than appropriate strategy. Related companies as similar to associated companies. They typically own fewer than 20% of shares in another company. This holding may be held because good dividends may be expected or the two companies are co-operating with each other in some area of business. Small shareholdings may be held by banks or Unit or Investment Trust companies as ingredients in their portfolio of ownership.
Allow us to help you to register a holding company and get it running. Same day holding companies formation for £52.00. New business incorporation usually completed in 4-6 hours using Companies House online company registration services. Our methods rely heavily on information-searches made by electronic means, either from local disks and servers, or from specialised, restricted-access websites. Apart from reducing the clutter, this approach has been shown to yield substantially faster and more accurate results, not only providing a superior service to traditional law-book based approaches, but also significant savings which we try to pass on to our clients. We supply expert advice in navigating English legal and business systems helping you start a business in England, Scotland, Northern Ireland and/or the Republic of Ireland. If you have an idea for a business, we can also assist you in start-up your new business directly in the UK from the ground up. In the United Kingdom, you must register your business, which we can do for you. Additional services include domain registration, trademark registration, provision of the registered office address and nominee secretarial services. We can also arrange for documents to be certified by apostille at foreign and commonwealth offices, and for documents to be legalised at foreign embassies. Let us know how we can help.
Choose one of the following packages that will best serve you:
HOLDING COMPANIES FORMATIONS. FORMATION OF HOLDING COMPANY: HOLDING COMPANIES INCORPORATED IN UNITED KINGDOM. INCORPORATION AND REGISTRATION OF HOLDING COMPANIES
Holding Company is a company that usually confines its activities to owning stock in and supervising management of other companies. A holding company usually owns a controlling interest in the companies whose stock it holds. In order for a corporation to gain the benefits of tax consolidation, including tax free dividends and the ability to share operating losses, the holding company must own 80% or more of the voting stock of the company.
A company may own one or more other companies which are its subsidiaries. The relationship between parent and subsidiary depends on majority control of the voting rights of shares or the ability to appoint the majority of directors. The precise definition of a holding company is in section 736 of the Companies Act 1985. In June 2002 the UK government introduced a capital gains tax exemption for UK companies with substantial shareholdings in another company. The new rules have now been clarified and apply to UK registered companies, foreign registered companies resident in the UK for tax purposes, as well as UK branches of companies registered outside the United Kingdom.
If you want to become familiar with the description and the contents of holding companies registration packages, offered by Coddan CPM LTD and to find above, what kind of service is included in this or that holding companies incorporation package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the business registration within United Kingdom, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen. The basic document package we provide will not differ significantly from that available at a major corporate law office. Finding and Using Information on This Page:Holding Company Registration Services | Great Britain as an International Holding Company Location | Exporting Companies Using Double Tax Treaties | The Substantial Shareholder Exemption | Online UK Holding Company Formation |
Form a holdings company online in minutes at lawyer-free prices. Coddan CPM LTD was developed by expert attorneys with experience at the most prestigious law firms in the country. We've helped over 50,000 satisfied customers, and our know-how allows us to prepare legal documents quickly and efficiently. Our documents contain advanced provisions that are not found in simple "do-it-yourself" kits or manuals. Coddan CPM LTD lets you take care of common legal procedures without ever leaving your home or office. Our research area contains plenty of helpful guidance. Simply answer an easy-to-understand questionnaire, and Coddan takes care of the rest - no need to download, no need to print. You will receive the completed legal documents printed on quality acid-free paper. How to: Establish a Holding Company in the UK | Form a Holding Corporation in BVI | Incorporate a Cyprus Holding Company | Start a Holding Company in Delaware | Holding Company Formation in Hong Kong
Important Links
Holding Company subscribers may be residents outside the UK. You must appoint a minimum of 1 Director. Directors can be corporate bodies or private individuals. A Director can be of any nationality. All companies must appoint a company Secretary. A Secretary can be of any nationality. If there is only ONE Director he or she CANNOT also be the Secretary. There is no maximum and no minimum share capital. There is no minimum share capital, no paid-in capital requirement. The holding company is required to have a registered office in the United Kingdom.
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Live Help: Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours, our business center will be closed. When you click on the button, you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is free! There are no hidden fees. We offer the service as a courtesy to our website visitors.
Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable.
We accept phone orders during normal business hours. Credit cards are the preferred method of payment; we accept VISA, MasterCard and Delta. We can accept payment in UK Pounds Sterling, US Dollars, Euros, Australian Dollars and Canadian Dollars. If you call and receive voicemail, just leave your name and number, as clearly and as possible, and we will call you back as soon as possible.
Monday - Friday: 9:30am to 17:30pm Saturday: (offices are closed) Sunday: (offices are closed) Holidays: (offices are closed on all recognized UK holidays).
UK HOLDING COMPANY REGISTRATION SERVICES. WHAT IS A BRITISH HOLDING COMPANY?
UK holding companies as companies the purpose of which consists exclusively or primly in the administration of assets or in participation in or the permanent administration of interest in other enterprises. A standard limited company may be used as a holding company of any kind of entity anywhere in the world. Such a structure enhances the owner's privacy, facilitates ultimate sale of the underlying business and may have other practical benefits in the course of day-to-day operations. For example, the holding company could be used to provide loans to subsidiaries in various countries, on which the subsidiaries may obtain the benefit of tax deductions on interest paid.
The English or Scottish holding company of overseas subsidiary companies already performs creditably as an international holding company. Consider the following: the United Kingdom has the widest network of double tax treaties in the world, and is also a signatory to the EU Parent / Subsidiary Directive. Given the quality and extent of the UK's tax treaty network, it is arguably the best performer in the important discipline of extracting overseas dividends at the minimum tax cost.
Whilst the United Kingdom offers no exemption from UK corporation tax on foreign income dividends, it grants double tax relief by way of a credit for foreign corporation tax underlying the dividends provided that the company holds, directly or indirectly, at least 10% of the share capital of the company from whom the tax credit is claimed. Where the underlying foreign corporate tax rate is 30% or more, then the credit will normally be a complete relief from UK corporation tax - and therefore as good as an exemption. It is significant that the UK has lower rates of corporation tax than most other industrial nations.
UK Holding Company's from only £52.00! All Inclusive Company Registration. Each limited company package includes all statutory paperwork and is fully compliant with company law. All our private UK companies are general trading companies and can be used to conduct any type of business. A Certificate of Incorporation, and the Memorandum and Articles of Association of your company will be sent to you upon formation of your company. You can appoint your own directors and secretary BEFORE company incorporation. This is absolutely FREE. Our 4-8 hour online incorporation service enables you to register your company quickly and effortlessly. All government and filing fees are included in the cost of our E-Quick pack. All certificates and documents will be sent directly to you via email immediately following the formation of your company. It will take just 5 minutes to complete the online registration form, then your company could be up and running within 4-8 working hours.
THE E-QUICK PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Company Pliers Seal - £20.00. 2. Laminated Hard-copy of the Certificate of Incorporation - £5.95. 3. Laminated Hard-copy of the Certificate of Incorporation, Bound Copies of the Memorandum & Articles, and Combined Company Register - £12.95. 4. Domain Name Registration for two years - £16.00. 5. Provision of a Registered Office Address for 12 months - £50.00. 6. Provision of a Nominee Company Secretary for 12 months - £49.95. 7. Certificate of Good Standing - £35.00. 8. Notarisation & Apostille of Documents.
The United Kingdom is remarkable in not imposing any withholding tax on dividends distributed by companies to UK non-resident shareholders. It therefore outperforms the other leading holding company locations in this regard.
The United Kingdom has always had substantial non-tax attractions as a location for the holding company of an international group. The Headline corporate tax rate is the lowest of the major economies and generous interest relief provisions reduce taxable profits and make the effective tax rate even lower. The UK has an extremely extensive network of double tax agreements. Unlike many of its European counterparts, the UK does not have capital duty on share subscriptions and there is no withholding tax on dividends paid by United Kingdom companies, irrespective of the residence of the shareholder.
Legislation exempting capital gains on the disposal of substantial shareholdings took effect 1 April 2002 in advance of the publication of the 2002 Finance Bill which will enact the legislation retrospectively. This participation exemption is a major development and one which makes the UK even more attractive. For many years the business community has argued for the introduction of a "participation exemption" on capital gains and dividends to bring it in line with a number of other European jurisdictions in particular the Netherlands.
The new legislation meets these demands whilst setting out certain conditions and anti-abuse provisions and effectively sets the UK ahead of its competitors in respect of its holding company facility.
For capital gains exemption the investing company must have held a substantial shareholding in the company invested in for a period of twelve months within the two years prior to the disposal. It is not therefore necessary for the investing company to have a substantial shareholding at the time of the disposal to qualify. A substantial shareholding is at least 10% of the ordinary share capital of the company invested in and 10% of the rights to profits available for distribution and assets on a winding up.
The investing company must be either a sole trading company or a member of a trading group throughout the period beginning with the start of the last twelve month period in which the substantial shareholding requirements was met, and ending at the time of disposal and also immediately after the disposal.
"Trading" in this sense extends to preparing to carry out a trade or to acquiring a significant interest in the share capital of another trading company or holding company of a trading group (subject to the proviso that the interest acquired is not already a member of the acquiring company's group).
The investing company must be a "qualifying trading company" or a "qualifying holding company" throughout the period beginning with the start of the last twelve month period in which the substantial shareholding condition is met and ending at the time of the disposal and also immediately after the disposal. The definition of a "qualifying trading company" is one which does not carry on to any substantial extent non-trading activities such as holding intellectual property and ownership of land or assets as investments.
A "qualifying holding company" is one which together with its 51% subsidiaries does not carry on to any substantial extent non-trading activities.
Whilst the legislation marks the UK out further as an attractive jurisdiction for holding company purposes it is important to remember that exemption applies only where the conditions set out in the legislation are met. The investing company must be a trading company immediately after the disposal. If as a consequence of a disposal, a company ceases to be a trading company or the holding company of a trading group because its non-trading activities comprise more than 20% of its activities, the gains will not be exempt.
United Kingdom owned groups have frequently used intermediate holding companies to hold shares in overseas trading companies. This has been done for a variety of reasons including getting the best mix of tax rates. With the advent of the new legislation the need for such intermediate holding companies is now questionable and the cost of establishing and maintaining such companies may no longer be justified in many situations. The withholding tax suffered on distributions via an intermediate holding company is more likely to be more than would be the case if the UK parent owned the company directly.
There may be tax-planning opportunities in eliminating the overseas holding companies. In particular, if such companies have retained profits, it may be possible to bring those profits onshore tax-free. In June 2002 the UK government introduced a capital gains tax exemption for UK companies with substantial shareholdings in another company. The new rules have now been clarified and apply to registered companies, foreign registered companies resident in the UK for tax purposes, as well as UK branches of companies registered outside the United Kingdom.
The following requirements must be observed: the Investing Company (or Holding Company) must hold at least 10% of the ordinary share capital of the Subsidiary company for at least 12 continuous months (then 12 months must not begin more than 2 years prior to the disposal of the shares). The Investing Company (or Holding company) must be a trading company by itself or a holding company of a trading group during the 12 months period mentioned above. The Subsidiary company must be either a trading company by itself or the Holding company of a trading group for the whole of the 12-month period. Trading activities mean activities in a trade, profession, or vocation carried on, on a commercial basis with a view of generating profits. Similar provisions apply for group companies.
Do You Want to Register Holding Company Offshore? Use may be made of an offshore holding company which would fund the operation of subsidiaries in various countries so that the subsidiaries obtain the benefit of tax deductions on interest paid. If the holding company is situated in an offshore area where there are no income or corporation taxes and no requirement that dividends must be paid, then the profits which are accumulated in the tax free climate can be used to fund the requirement of subsidiaries or reinvested as business convenience suggests.
A BVI (or Seychelles, Belize, Cyprus, Hong Kong or Spanish) IBC may be used as a holding company of any kind of entity anywhere in the world. Such a structure enhances the owner's privacy, facilitates ultimate sale of the underlying business and may have other practical benefits in the course of day to day operations. For example, the holding company could be used to provide loans to subsidiaries in various countries, on which the subsidiaries may obtain the benefit of tax deductions on interest paid. Since the holding company is situated in the BVI, where there are no income or corporate taxes on IBCs and no dividend payment requirements, profits which are accumulated in the tax free jurisdiction can be used to fund subsidiaries' requirements or reinvested elsewhere. Offshore Tax Havens:Should You Go Offshore For Asset Protection?
Do Are You Aware of the Corporate tax Incentives in the State of Delaware? Do you want to minimize corporate income taxes, improve profits, and consequently increase cash flow? Learn how to shift taxable income from one state to tax exempt income in Delaware. The State of Delaware is the home of many successful companies due to its business friendly infrastructure including its business climate, court structure, and corporate tax exemptions. As states today are increasing the tax burden on corporations, you can take advantage of an attractive opportunity in the State of Delaware - the Delaware Holding Company.
There are more than 7,000 such companies registered in Delaware. This large number demonstrates the recognition and widespread acceptance that this savings opportunity has achieved since the holding company law was first enacted in 1958. The following information introduces you to the concept of the Delaware holding company so that you can start an informed discussion with your financial, tax, and legal advisors on this unique tax advantage. Section 1902(b)(8) of the Delaware code provides exemption from Delaware corporate income tax for corporations whose activities within the State of Delaware are confined to the maintenance and management of their intangible investments and the collection and distribution of the income from such investments or from tangible property physically located outside this state.
Under the law, "intangible investments" include, without limitation, investments in stocks, bonds, notes, and other debt obligations (including debt obligations of affiliated corporations), patents, patent applications, trademarks, trade names, and similar types of intangible assets. A "corporation" can also refer to a limited liability company (LLC) or a business trust if the entity is taxable as a corporation for federal income tax purposes. "Intangible investments" can also refer to service marks, copyrights, franchises, technical know-how, inventions, unique computer software or manufacturing processes, and secret formulas. This list is not necessarily all-inclusive.
The following examples represent some of the more common uses of Delaware holding companies. These examples by no means constitute an exhaustive list of all possible uses as new and innovative applications of Delaware holding companies are increasing.
Holding an Investment Portfolio: If a corporation pays state income tax on investment income, the income-producing assets can be contributed to a Delaware holding company. The investment income would then be exempt from Delaware corporate income tax. The parent’s cash requirements can be met through a dividend, if the parent’s home state allows a dividend received deduction in computing state taxable income, or a loan from the Delaware holding company to the parent at prevailing market rates. Debt obligations of affiliates are permissible investments for a Delaware holding company. Interest received by a Delaware holding company on a loan to an affiliate will not be subject to Delaware tax and may generate an interest deduction to the affiliate in its domicile jurisdiction.
Intellectual Property Activities: When a company holds the rights to patents, trademarks, or other similar intellectual property, state tax savings can be realized by transferring the assets to a Delaware holding company and collecting the royalties or license fees, whether from affiliates or unrelated third parties, in the Delaware holding company. The company holding and licensing such intellectual property can perform the necessary policing activities to maintain proper registration. Moreover, this may provide a deductible expense for the licensee. Properly structured intellectual property licensing arrangements can produce substantial state tax savings to an affiliated group of corporations.
Sales Vehicle: When substantial investment assets or subsidiaries are to be sold at a gain, state taxes may be saved by transferring the assets or subsidiaries to a Delaware holding company in a reasonable time prior to the sale. Under appropriate circumstances, the gain is not subject to Delaware tax and it may also escape the tax that would have been payable to the parent’s state of domicile if the parent had sold the assets itself.
Minority Stock Interest: Several states in their income tax statutes provide an exclusion for dividends received from wholly owned domestic subsidiaries, but not from foreign subsidiaries or from subsidiaries less than a certain percentage of whose stock is owned. If the stock in such a subsidiary were to be transferred to a Delaware holding company, the dividends paid by the subsidiary could escape Delaware tax. The Delaware holding company’s payment to its parent in the form of a dividend may qualify for exclusion from the parent’s state tax base. For those states that follow the federal deduction, 100% of the dividends received from a Delaware holding company of which the parent owns at least 80% would not be subject to taxation. How to Form a Holding Company in the UK | Incorporate a Holding Corporation in BVI | Start-Up a Cyprus Holding Company | Form a Holding Company in Delaware | Holding Company Registration in Hong Kong |
GREAT BRITAIN AS AN INTERNATIONAL HOLDING COMPANY LOCATION
The United Kingdom has generally been overlooked as an international holding company location. For many years this state of affairs was exacerbated by the UK tax regime's requirement that an advanced payment of corporation tax, known as ACT, become due whenever a dividend was paid. In many cases zero or very low rates of UK corporation tax would be payable on the foreign income of such companies (due to double taxation relief), and thus ACT became irrecoverable as there was no UK corporation tax payable against which to set off the ACT. Fortunately, ACT is no longer with us, and this has put the United Kingdom in a very competitive position with the famous international holding company regimes of the European continent: Austria, Belgium, Denmark, Luxemburg, The Netherlands and Switzerland.
In fact, the United Kingdom has many competitive advantages over these "designer" holding company regimes. The country has a wider network of double tax treaties than its main competitors. There is no capital duly, no minimum paid-up share capital requirements and no dividend withholding tax regime. In addition, the administrative costs of UK companies are comparatively low.
Qualifying for Treaty Relief on Withholding Tax: The reduced or zero rate of withholding tax must be dependent on the British company being the beneficial owner of the dividend income. It cannot be dependent on the English company being the beneficial owner of the shares themselves.
Foreign Tax Credit Relief: The UK company must hold at least 10% of the voting power target company too claim the tax relief in the United Kingdom for underlying foreign tax payable on the target company's income.
Foreign Capital Gains Tax Regimes: These should be no domestic capital gains tax (CGT) levied in the target company's country on the gains of the United Kingdom company arising from the disposal of the shares of the target company.
The double tax treaty between the UK and the target company's country will often oust the target company's domestic taxing rights in favour of UK taxing rights, but the question is: can a UK company, which is receiving capital gains as a bare trustee of an offshore principal, obtain treaty protection from any domestic CGT levied by the target company's country?
This is not a problem with the U.S. case study shown, as its domestic law does not tax capital gains of non-resident disposing US shares, provided that the greater part of the USA company's value is not derived form real estate. But this is an interesting area where these is such a foreign domestic tax. Take Italy as an example, whose law does impose a domestic capital gains tax on the gains non-resident derive from selling Italian company shares. If the UK company in this case study also wholly owned an Italian subsidiary, and assuming that it held the shares of Italian company under the terms of an agreement with its offshore parent of the kind just outlined, then on the face of it treaty between Italy and the UK giving taxing rights to the United Kingdom.
When one look at the articles of the some treaty governing distribution of dividends<, interests and royalties, there are express provision in those various articles stipulating that the recipient of those distribution must be the beneficial owner of such income in order to benefit from the treaty provisions. It would therefore appear that advisors have a basis for relying on the wording of Article 13 (4) of the UK-Italian treaty to claim treaty exemption from capital gains tax in Italy for a United Kingdom company holding shares in an Italian company under a division of share rights agreement of the kind considered in this article.
Tax Fraud: This does lead on the question of the money laundering. If a UK professional service provider assists a foreign client to commit tax fraud on a foreign revenue authority, then if a United Kingdom service provider offers his assistance knowing or suspecting foreign tax fraud, a money laundering offence may be committed in the UK. So in a scenario such as this where reliance is being placed on the capital gains article of the UK-Italian treaty by the British company under a "division of share rights agreement", the tax planning must be meticulously implemented. The division of share rights must be valid and effective and the parties must ensure that they are in a position to substantiate their respective entitlement to the appropriate Revenue authorities.
Conclusion: The division of shares rights agreement is a simpler solution to the CGT problem of UK holding companies than other planning techniques involving split share capital arrangements in the target company or the UK business entity. A division of share rights agreements becomes contentious where the target company's country has a domestic CGT regime. This can be overridden by an appropriately worded United Kingdom double tax treaty, but much will be depend upon the precise wording of this treaty.
Meanwhile, the Treasure have proposed an exemption for UK companies which meet certain criteria from corporation tax or capital gains realized from disposing of "substantial" shareholdings, and the Chancellor of the Exchequer, in his pre-budget report on November 27, 2001 has confirmed that the government are now proceeding the draft legislation to progress this welcome initiative. The precise details of the exemption should be published following the Chancellor's Budget Speech in the House of Commons on 17 April 2002. UK holding companies which do not come within the terms of the new participation exemption should consider relying on the CGT planning points referred to in this article.
EXPORTING COMPANIES USING DOUBLE TAX TREATIES
Prior to the enactment of section 66, Finance Act 1988, it was perfectly possible to migrate a company incorporated under the laws of one of the constituent jurisdictions of the UK to a non-UK jurisdiction. All one needed to do was to ensure that the company's central management and control was at all times exercised outside the UK. Section 66, Finance Act 1988 removed this flexibility; it provided that (subject to certain grand-fathering and transitional rules) a company which was incorporated in the UK would thenceforth be regarded for UK tax purposes as resident in the UK, irrespective of where its central management and control was exercised from.
However, section 66, Finance Act 1988, is subject to the provisions of any applicable double tax treaty. Thus, the provisions of a double tax treaty may make a incorporated company a resident of an overseas jurisdiction (and not of the UK) for the purposes of that treaty. See, for example, Article 3(3) of the UK-Barbados Agreement of 26th March 1970, as amended: "3(3) Where by reason of the provisions of paragraph (1) of this Article a person other than an individual is a resident of both Contracting States then it shall be deemed to be a resident of a Contracting State in which its place of effective management is situated."
Other examples of UK double tax treaties that can be used for this purpose are those with Cyprus, Mauritius and Switzerland. It should be noted that the concept of central management and control is not quite the same as the place of effective management. The former test looks to the highest level of policy decision-making relating to the company's business, whereas it is thought that effective management refers more to the day-to-day management of the business.
THE SUBSTANTIAL SHAREHOLDER EXEMPTION
UK incorporated (and resident) companies have always been somewhat troublesome as international holding vehicles. Over the years, successive UK Governments have tinkered with the corporation tax system in an effort to attract international corporate business to the UK, with varying degrees of success. The position that we are now in is as follows.
A UK incorporated holding company is within the charge to corporation tax on its worldwide income and capital gains. If its only income is dividend income from subsidiary companies, that income will either be exempt (UK dividend income) or within the charge to corporation tax (foreign dividend income). Unilateral relief or double tax relief may be available to mitigate the incidence of corporation tax on foreign dividend income, in respect of underlying tax borne by the dividending company or withholding tax payable on the dividend itself. Where the credit given for the underlying tax and/or the withholding tax is greater than or equal to the corporation tax payable (the highest rate of corporation tax is 30%), no corporation tax will be due; where, however, the credit given is less than the corporation tax payable, the difference between the credit and the corporation tax payable will be due. Dividends declared (or, in the case of interim dividends, declared and paid) by a UK resident company attract no withholding tax.
If a UK registered holding company only owns shares in subsidiary companies (wherever incorporated and resident) and all (or predominately all) of those companies are trading companies, the new substantial shareholder exemption from corporation tax may be in point on a disposal of some or all of the shares in those companies.
A UK incorporated holding company will own a substantial shareholding in another company (the "investee company") if it owns shares by virtue of which: it owns not less than 10% of the investee company's ordinary share capital; it is beneficially entitled to not less than 10% of the profits of the investee company available for distribution to equity holders of the investee company; and it would be beneficially entitled on a winding-up of the investee company to not less than 10% of the assets of the investee company available for distribution to equity holders.
The UK incorporated holding company must have owned the shareholding for a certain period of time before the disposal, in order to qualify for the exemption. In short, in the 2 years prior to disposal, the UK incorporated holding company must be able to show a continuous period of ownership of 12 months.
Finally, the UK registered holding company, in addition to having owned a substantial shareholding throughout the requisite continuous 12 month period, must either be a sole trading company (which, where it is purely a holding company, it won't be) or a member of trading group, both throughout the requisite period of pre-disposal ownership and immediately after the time of disposal. In this respect, a group of companies consists of the UK incorporated holding company and its direct or indirect 51% subsidiaries. A trading group is a group, one or more of whose members carry on trading activities, in which the activities of its members, taken together, do not include to a substantial extent activities other than trading activities.
In terms of the investee company, it must have been a trading company, a holding company of a trading group or a holding company of a trading sub-group throughout the period beginning with the start of the UK incorporated holding company's requisite continuous 12 month ownership period and ending with the time of disposal, and immediately after the time of disposal.
The above is a merely a snapshot of the relevant legislation. It is complex, and contains certain anti-avoidance provisions, which would always need to be considered. It is also worth remembering that any non-UK resident subsidiary company of a UK incorporated holding company will be a controlled foreign company and, therefore, the exemptions to the controlled foreign company legislation (most notably, the exempt activities exemption and the motive test exemption) would need to be considered.
ONLINE UK HOLDING COMPANY FORMATION & SEARCH SERVICES WITH FREE NAME CHECK, ENQUIRY AND ORDER FORMS
Coddan provides services to new and existing businesses including private company limited by shares, holding company, and subsidiary company formations services, from ready-made companies to own name incorporations in United Kingdom, Northern Ireland and Scotland.
Our e-formation service eliminates the need to complete Forms 288a (to appoint the directors and secretary), making the process of forming a holding company even easier and quicker. With our new online electronic companies registration system, we take you through each step of your holdings company incorporation process as quickly and as simply as possible. Our specialist knowledge and vast experience enable us to provide a fast, efficient, and professional service, and one which a great many businesses have been founded and built upon to date.
Once you have completed our online order form and your new limited company is in the processing stage of being registered at Companies House you will receive an order acknowledgement from us by email. Documents we send you via email for the electronic E-Quick Formation Package (£52.00) are: Certificate of Incorporation - in PDF format, special Memorandum & Articles of Association, First Minutes of Directors meeting, share certificates, Registers of Members, Directors and Secretaries, Directors Interests, Company charges - in Word format.
It's a simple process to register your company. All you need to do is use the free availability check to see if your chosen company name is available. If so, then fill out a few details using the online forms, enter your payment details, and submit your application. No documents to sign. We form companies with you as the first directors, secretary and shareholders. Our online order form is a completely web based application, whereby all the company details are entered into our system and submitted electronic through The Companies House Filing Service.
How it works. Choose from our selection of business formations: E-Quick, Economy, Premier or Deluxe Package. Enter your contact and company directors, secretaries and shareholders details using our online order form facility. You are sent immediate confirmation via email of your transaction from WorldPay and ourselves. You will receive your company documents in a short time, typically six hours (*If ordered before 11:00 and Companies House permitting). It's that simple!
E-Quick UK Holding Company Formation Package - £52.00. With our new online electronic company creation system, we take you through each step of your company incorporation process as quickly and as simply as possible. Coddan provides a cost-effective, rapid service for incorporating companies. Our UK company registration process is completely electronic, with no forms to complete, making us one of the few fully-electronic company formation services in the UK. Once you have incorporated your company with us, we also provide online processing for the following Companies House forms: Form 287 - Change of registered office; Form 288a - Appointment of company secretary or director.
These forms are raised automatically when you edit your company details in our unique company database. All you need to do is tell us the name of the company that you would like to form and then leave the rest to us. Your new limited company will normally be formed within 4-8 working hours of request, and minutes later you will receive your Certificate of Incorporation" by email. Documents we send you via email for the electronic package are: Certificate of Incorporation - in PDF format, Memorandum & Articles of Association, First Minutes of Directors meeting, share certificates, Registers of Members, Directors and Secretaries, Directors Interests and Company charges - in Word format. Additional services are available.
With all of our formations, the Certificate of Incorporation, the Memorandum of Association and the Articles of Association are all sent to you electronically, by email as Adobe Acrobat files. Acrobat is a free reader program so you don't need anything else to view and print your documents. You May Use This Form to Incorporate a New Holding Company: E-Quick Holding Co., Incorporation Package - £52.00
We want to make the establishment of your holding company quick and easy. We have come up with a unique fast-track system which will allow you to own a company and sign on its behalf in as little as 4-8 hours. Unlike most firms offering this service, our system is completely transparent and easy-to-follow, with all costs being clearly outlined up-front. For more information about our holding company incorporation packages, please e-mail info@ukincorp.co.uk or call: Call FREE 033 0808-0089 or +44 (0) 207.935.5171, fax: +44 207.504.3531
Applying online to Coddan is easy, reliable and makes the entire application process smoother for you and us. Follow the 1-step approach to searching and registering your company with Companies House, without the need for extensive paperwork; all of it is covered by Coddan (click on the Online Order Forms icon). Our e-formation service eliminates the need to complete Forms 288a (to appoint the directors and secretary), Form 288b, Form 288c, or Form 287, making the process of companies incorporation even easier and quicker.
Economy English Holding Company Incorporation Package - £102.00. All our company registration packs are electronically formed at Companies House with no requirement to complete any old style paper forms! Your new company will be formed on the same day (subject to Companies House) in the name you choose (where possible). Our packages are designed to give you everything you need at little cost.
If you do not see what you are looking for call us and we will endeavour to solve your problem. All UK registered companies are legally required to have a UK registered office address. It is the address of a company to which Companies House letters and reminders will be sent. The registered office address can be anywhere in England and Wales (or Scotland if your company is registered there). The registered office address must always be an effective address for delivering documents to the company, and to avoid delays it is important that all correspondence sent to this address is dealt with promptly.
The registered office address cannot be a PO Box; it must be an address where legal papers can be served. The company's name should also be displayed outside of the premises. You may want to consider the benefits of using our registered office address as detailed below.
Our registered office address will be recorded at Companies House and all official mail will be forwarded to your designated address. We will also display your company name outside of our offices as required by law. If you want to be a Scottish registered company and governed by Scottish law then you will need a registered address in Scotland. We can provide you with a prestigious address in Edinburgh.
For UK companies owned by overseas residents it is a legal requirement to have a UK registered address where official government mail can sent. Please note that this address should not be used for any trading purposes or general correspondence, or for any form of advertising. The address is only to be used to comply with the requirements of the Companies Act 1985 in relation to official mail and documents.
Users of our registered office service must keep us informed of any change to their forwarding address and telephone, fax or email contact points. If clients' mail is returned undelivered we will be obliged to inform the appropriate authorities of our inability to establish contact with the officers of your company. A renewal invoice is issued each year several weeks prior to the renewal date. If payment is not received this service ceases. You must immediately notify us of your new registered office so we can inform Companies House.
In the event that a new registered office address is not provided to us we are obliged to inform Companies House of your last known contact details and advise them that your company no longer seems to have a qualifying registered office. If they then determine that your company is no longer compliant with the registration requirements for limited company they may decide to delete your company from the Register.
Please note registered office address is not to be used for general correspondence; our trade mail service is available for this purpose. The registered office address will also be used by the UK tax authorities, and other government departments, to contact the company. In the event the company is involved in any legal action official papers will often be served at the registered office address.
Does the registered office address have to be my main trading address? No, you can use one address as your trading address and another address for your registered office. If you are trading from home you may want to consider using one of Coddan prestigious addresses as your registered office and using a local PO Box for general correspondence.
The company stationery, including the letterhead, should contain the company’s official name, as registered with Companies House; the company's registered office address; the registration number or license number; the VAT registration number (if any); and the place of registration, i.e. England & Wales or Scotland. You May Use This Link to Establish a New Holding Company: Economy Holding Company Start-Up Package - £102.00
Premier British Holdings Company Registration Package - £151.95. This package includes registered office and nominee company secretary for 12 months (includes processing annual return). Coddan can provide a nominee company secretary for your private limited company.
We have many years experience acting as secretary for hundreds of companies so you can feel confident we have the required knowledge to perform this role. The nominee company secretary service is ideal for sole directors unable to find someone to take on this role. It means you can still operate a limited company as sole director and shareholder whilst benefiting from the excellent support of a professional company. For non-UK residents this service often proves invaluable as Coddan are familiar with UK authorities and procedures.
This package designed to meet the requirements of those who do not want to appoint a second person to their company. The Companies Act requires a minimum of two officers to be appointed at all times. If you are in business on your own it can often be difficult to find someone else to take on the role of company secretary as they maybe unsure of there legal obligations and responsibilities.
The company secretary service will need to be renewed after one year. You will be contacted regarding confirmation of details re: the filing of the annual return, and renewal of the service. If we are to provide an efficient service, you will need to keep us informed of any changes in contact details. If we are unable to contact you, we will be unable to file the annual return, nor continue to act on your behalf. Ultimately we will have to refer the matter to Companies House. You May Use This Form to Register a New Holding Company: Premier Holding Company Incorporation Package - £151.95
Deluxe UK Holding Company Creation Package - £276.95. This package includes registered office, nominee company secretary for 12 months (includes processing annual return) and nominee director service (includes General Power of Attorney).
If you do not wish to disclose director and shareholder names and other personal details for the incorporation, we can provide a nominee director and a nominee shareholder. Usually one share is issued to the company director, who will issue a Declaration of Trust in favor of the company owner. This service has been designed to allow our clients to retain their privacy for legitimate reasons in a world where your personal information can easily be obtained by anyone that knows where to look. This service is not to be used for any illegal purposes.
We have designed a specialist service to provide our clients with anonymity from their limited company. By appointing our corporate nominee director you can remain anonymous from your company, as no personal details will be recorded at Companies House. You will still control the company as an authorised representative but it will not be possible to search Companies House records to identify you. If you combine the nominee director service with our nominee shareholder and nominee secretary then no reference will be made to you at Companies House. You will however still retain full control and ownership of the company through our specialist agreements.
Check Your Order Status
UK holding companies as companies the purpose of which consists exclusively or primly in the administration of assets or in participation in or the permanent administration of interest in other enterprises. A standard limited company may be used as a holding company of any kind of entity anywhere in the world. Such a structure enhances the owner's privacy, facilitates ultimate sale of the underlying business and may have other practical benefits in the course of day-to-day operations. For example, the holding company could be used to provide loans to subsidiaries in various countries, on which the subsidiaries may obtain the benefit of tax deductions on interest paid. 
+44 (0) 207.935.5171 
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The United Kingdom has generally been overlooked as an international holding company location. For many years this state of affairs was exacerbated by the UK tax regime's requirement that an advanced payment of corporation tax, known as ACT, become due whenever a dividend was paid. In many cases zero or very low rates of UK corporation tax would be payable on the foreign income of such companies (due to double taxation relief), and thus ACT became irrecoverable as there was no UK corporation tax payable against which to set off the ACT. Fortunately, ACT is no longer with us, and this has put the United Kingdom in a very competitive position with the famous international holding company regimes of the European continent: Austria, Belgium, Denmark, Luxemburg, The Netherlands and Switzerland. 
