Most trusted place to setup company in Europe?

[EliasIT]

Forester said:
Certainly; yet I guessed that for @benq (OP) it would not be a problem, in his situation....
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I agree with @Forester this guy seems to do well with his business and to get a local director would be he last problem.

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[benq]

We have used Deloitte for nearly a lifetime, and they've always ensured that the tax authorities are kept at bay while opening doors to bank credit when needed. Additionally, they've been excellent at optimizing my personal tax burden and, above all, have a solid understanding of my goals and preferences.

That said, I can see from the responses in this thread that there is room for alternative approaches to Deloitte's suggestions, and I've truly appreciated reading all your insightful replies. I've now reached out to advisors in Liechtenstein to explore the potential for a setup there. I'm also still considering a company in Switzerland as a public-facing entity and have requested a thorough review of the tax disadvantages.

Please feel free to share more advice. I've contributed to the forum with a lifetime membership as a way to give back to this fantastic platform and to show that I'm serious.

 

[JohnnyDoe]

benq said:
We have used Deloitte for nearly a lifetime, and they've always ensured that the tax authorities are kept at bay while opening doors to bank credit when needed. Additionally, they've been excellent at optimizing my personal tax burden and, above all, have a solid understanding of my goals and preferences.

That said, I can see from the responses in this thread that there is room for alternative approaches to Deloitte's suggestions, and I've truly appreciated reading all your insightful replies. I've now reached out to advisors in Liechtenstein to explore the potential for a setup there. I'm also still considering a company in Switzerland as a public-facing entity and have requested a thorough review of the tax disadvantages.

Please feel free to share more advice. I've contributed to the forum with a lifetime membership as a way to give back to this fantastic platform and to show that I'm serious.
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Try to think out of the box. Deloitte is the epitome of conventional thinking (when not incompetence).
I would also avoid patronizing such a company for a plethora of ethical reasons.
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[koohl]

I completely understand your choice of advisors for a larger enterprise like yours. While it may not seem enormous, it falls into the category of small to medium-sized Enterprises (SME's) in many countries. If you have the budget and flexibility to work with advisors like Deloitte and complement that with a skilled law firm and professional in-house bookkeeping, you can keep many potential problems at bay. In the end, it's worth every penny.

In our business, which is roughly the same size as yours, we spend around €125,000 annually on accounting, tax advisory, legal services, and all financial matters. That investment pays for itself many times over every year.

For smaller business owners or people earning their money in a simpler, more convenient way, who only have to worry about their own well being, it might seem completely nonsensical. But if you're playing at a professional level and want to stay there, you have to act like the pros. That's the name of the game.

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[lacomaco]

Two problems I see in these proposal: 1. To transfer part of full ownership of the operating company might be taxable if not done with proper transfer pricing. Possibility (nothing more, please check) of a share swap or forming a European SE could possibly avoid that. 2. With reference to Lichtenstein nobody indicated the WHT on the dividends coming out to the holding company, only the individual's personal income tax liability from getting out the money from the holding company. As an EEA country the parent/subsidiary directive cannot be applied, and for this possible solution an EU holding company might be better than Lichtenstein.

And I might be wrong

 

[Don]

lacomaco said:
Two problems I see in these proposal: 1. To transfer part of full ownership of the operating company might be taxable if not done with proper transfer pricing. Possibility (nothing more, please check) of a share swap or forming a European SE could possibly avoid that.
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lacomaco said:
2. With reference to Lichtenstein nobody indicated the WHT on the dividends coming out to the holding company, only the individual's personal income tax liability from getting out the money from the holding company. As an EEA country the parent/subsidiary directive cannot be applied, and for this possible solution an EU holding company might be better than Lichtenstein.
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Great point.. so a lot depends on the persons individual tax residence.

 

[benq]

lacomaco said:
Two problems I see in these proposal: 1. To transfer part of full ownership of the operating company might be taxable if not done with proper transfer pricing. Possibility (nothing more, please check) of a share swap or forming a European SE could possibly avoid that. 2. With reference to Lichtenstein nobody indicated the WHT on the dividends coming out to the holding company, only the individual's personal income tax liability from getting out the money from the holding company. As an EEA country the parent/subsidiary directive cannot be applied, and for this possible solution an EU holding company might be better than Lichtenstein.

And I might be wrong
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And this is where my very skilled tax advisors come into play, providing me with immense value by ensuring everything is done correctly from the start. You are absolutely right, it's not everything that users here can or remember to share, which is why I use the thread as a hint and then conduct my own research.

I'm still very grateful for the help and input I receive here. It's invaluable and something I can't get from regular advisors.

 

[bubbledouble]

Marzio said:
Which you will now share so we can judge what you paid them for 😛
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he did, it's an massive budget OP has for advisors ja334¤¤#

 

[Forester]

Don said:
a lot depends on the persons individual tax residence.
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Definitely. As far as I understand, we are dicussing company strategies here, until now. Personal taxation is another issue, not taken into account yet. Of course, these issues are linked, to some extent.

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[aage]

Sols said:
Danish holding companies can be quite attractive for exits. There are special rules you can use to end up paying little to no tax in the event of an exit. I've seen a couple successfully executed.

Don't live in Denmark, though. Having a Danish holding company is a different story entirely from living there or even doing active trading business through a Danish company.
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I completely agree with Sols that a Danish company, in terms of prestige, is on the same level as Switzerland, Sweden, Norway, or the Netherlands for that matter. However, I don't know why Eliasit is so strongly opposed.

 

[benq]

bubbledouble said:
he did, it's an massive budget OP has for advisors ja334¤¤#
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It is not a significant budget considering the total revenue and the corporate structure, which is classified as moderately complex. For a small business, however, it might understandably seem like a substantial amount.

For the sake of clarity and to conclude this discussion, we opted for Switzerland with a Luxembourg parent company as the holding entity. Based on our calculations and the conclusions drawn by our financial strategists, this approach represents a solution that meets the conditions we set for our business while ensuring we maintain credibility with our customers and business partners.

 

[daniels27]

aage said:
However, I don't know why Eliasit is so strongly opposed.
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Many Danish here guy have severe problems with the Skat. The Danish tax authority had a lot of demands and then, they left. You can check @JohnLocke's case here
https://www.offshorecorptalk.com/th...l-if-account-got-closed-for-tax-office.44791/

I think a big part of the reason why OCT exists is because of the aggressive Skat.

Having read all those stories, I would not recommend Denmark either.

Last edited: Jan 6, 2025

 

[Marzio]

benq said:
we opted for Switzerland with a Luxembourg parent company as the holding entity
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I'd say it's an excellent setup if what you want to convey trust and prestige.

 

[PhantomOf ThePits]

benq said:
It is not a significant budget considering the total revenue and the corporate structure, which is classified as moderately complex. For a small business, however, it might understandably seem like a substantial amount.

For the sake of clarity and to conclude this discussion, we opted for Switzerland with a Luxembourg parent company as the holding entity. Based on our calculations and the conclusions drawn by our financial strategists, this approach represents a solution that meets the conditions we set for our business while ensuring we maintain credibility with our customers and business partners.
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Thank you for sharing @benq, appreciate it.

May I ask out of Curiosity why the TradeCo is in Switzerland and not Liechtenstein having the potential CH source tax on dividends in mind?

I assume with Lux holding the EU mother/daughter directive may apply, but 'i heard' in some cases CH made problems with that and retroactively applied Source taxes when trying to take more money into the EU Holding.

 

[JustAnotherNomad]

lacomaco said:
As an EEA country the parent/subsidiary directive cannot be applied, and for this possible solution an EU holding company might be better than Lichtenstein.
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Pretty sure that Liechtenstein is part of the PSD.

 

[JustAnotherNomad]

benq said:
For the sake of clarity and to conclude this discussion, we opted for Switzerland with a Luxembourg parent company as the holding entity. Based on our calculations and the conclusions drawn by our financial strategists, this approach represents a solution that meets the conditions we set for our business while ensuring we maintain credibility with our customers and business partners.
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That would have been my suggestion as well. Luxembourg is very popular for holding companies.
Alternatively, Poland also seems to have a holding regime as well now.

 

[SCHLOSSFINANZ]

JustAnotherNomad said:
Pretty sure that Liechtenstein is part of the PSD.
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Liechtenstein has a robust network of concluded DTAs
see

https://archiv.llv.li/files/stv/int-uebersicht-dba-tiea-engl.pdf

 

[Houdini]

benq said:
It is not a significant budget considering the total revenue and the corporate structure, which is classified as moderately complex. For a small business, however, it might understandably seem like a substantial amount.

For the sake of clarity and to conclude this discussion, we opted for Switzerland with a Luxembourg parent company as the holding entity. Based on our calculations and the conclusions drawn by our financial strategists, this approach represents a solution that meets the conditions we set for our business while ensuring we maintain credibility with our customers and business partners.
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That sounds like a really good decision and structure, even without knowing the specific factors behind your choice. However, as you mentioned, the thread was created more for inspiration than for advice or guidance.

 

[undercover]

Very interesting read! Although I don't have as large a budget as you, I've learned something new from reading this thread. Great work

 

[alpakiwi]

Based on the information discussed, here are two solid options which I consider the best for establishing a holding company in Europe:

1. UK Holding Company
   If you're not a UK tax resident and are comfortable with the UK's status outside the EU, setting up a UK holding entity is top. Key benefits include:
   • 0% taxation on any ownership under the ltd company over 5%
   • 0% withholding tax on dividends paid to non-residents, allowing for tax-free repatriation of profits.
   • A straightforward process for distributing dividends or dissolving the company to access its assets.
   • Low maintenance costs and a strong reputation as a jurisdiction for holding companies.
2. Luxembourg Société de Gestion de Patrimoine Familial (SPF)
   Designed specifically for private wealth management (e.g., holding activities), the Luxembourg SPF offers:
   • 0.25% tax with a maximum of €125K. Over that, it's 0%.
   • It cannot have commercial / trading activity and is restricted to only holding/managing assets. This is, in practice, very flexible, as certain management fees can qualify as "managing assets" and, therefore, inclusive.

Both structures are designed to minimize scrutiny from tax authorities (p.e. Spain ETVE/holding is not ideal despite 1.25% taxation) and take advantage of the robust double tax treaties available in the UK and Luxembourg. Each has unique advantages depending on your specific circumstances and requirements.

I hope this provides some useful guidance!