Holding companies
A holding company is a company that has no other purpose than to own shares in other companies.
Setting up a holding company
If you’re considering establishing a holding structure, it’s a good idea to do so from the start. The process for setting up a holding company is essentially the same as for a normal limited company, but with some important considerations related to the company’s purpose and structure.
First you need to start an AS:
- Select the name and found the company, get the founding document and articles of association.
- Select a bank and insert share capital, the bank confirms the deposit.
- Register the company in Brønnøysund and get your organisation number.
Get started with a limited company here
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If you want more information about holding companies and how it can suit your situation, arrange a meeting with one of our start-up advisers at DNB Oppstartslos
Why create a holding company?
Many entrepreneurs and investors choose to set up a holding company to structure their ownership.
- Tax benefits: Holding companies can almost tax-free receive dividends and equity gains thanks to the exemption method, which prevents double taxation before the money is withdrawn privately. See rates at The Norwegian Tax Administration.
- Risk relief: By owning multiple companies through a holding company, risk can be spread and isolated so that losses in an individual company do not affect others.
- Flexibility: The owners can more easily reinvest profits, establish new companies or make investments without immediate taxation.
- Collaboration between owners: If several people own a company together, individual holding companies can give owners greater freedom to control their own funds and dividends. This is advantageous if you want external investors.
Is holding company the right choice for you?
Holding companies are most relevant for companies that generate more profits than the owners need for wages or dividends. If you want to reinvest your income in new projects or other companies, a holding structure can be an advantage.
If you only want to set up your own workplace without major investment plans, it may be more appropriate to own the shares directly than to set up a holding company.
Disadvantages of holding companies
Although a holding company offers several advantages, it is also important to be aware of some disadvantages:
- Increased costs: Setting up and running a holding company involves several administrative tasks, such as accounting and tax reporting.
- Limited tax deductions: loss on shares within the exemption model do not usually provide tax deductions in the holding company, since losses on share in subsidiaries are exempt from the deduction right.
Holding companies need an accounting system
All AS (Limited Companies) have a bookkeeping obligation, which means that you must keep accounts in accordance with the Bookkeeping Act and the Bookkeeping Regulation.
In addition, all AS have an accounting obligation and must submit annual financial statements.
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What you need to know about holding companies
Start-up advisor tells you what you need to know about holding companies (Video in norwegian: 1:28)
Read more at DNB News
