A holding company is a business organization model that creates a parent company (holding company) that owns shares or interests in other companies (subsidiaries). The main purpose of such a structure is centralized asset management, property protection, and tax optimization https://yoursmartbusinessplan.com/how-to-build-a-global-holding-structure-in-2025-practice-risks-and-trends/

In a holding company, the parent company usually does not conduct active business activities, but controls subsidiaries that are engaged in specific types of business: trade, production, IT, finance, or investments. This allows for the separation of risks: the problems of one subsidiary do not affect others.

The advantages of a holding company structure are the possibility of effective tax planning, the use of international agreements to avoid double taxation, the convenience of attracting investments, and the protection of assets from operational risks. Holding companies are often created in jurisdictions with favorable tax conditions, such as Cyprus, the Netherlands, Luxembourg, or the UAE.

In addition to tax benefits, a holding company allows you to centralize management, distribute profits between various subsidiaries, and simplify the sale of a business or the involvement of partners in specific projects.