{"id":11827,"date":"2026-07-10T16:21:02","date_gmt":"2026-07-10T14:21:02","guid":{"rendered":"https:\/\/bbc-company.net\/mehr-vermoegen-weniger-steuern-lohnt-sich-eine-kapitalgesellschafts-oder-stiftungsholding-fuer-ihr-unternehmen"},"modified":"2026-07-15T13:34:23","modified_gmt":"2026-07-15T11:34:23","slug":"mehr-vermoegen-weniger-steuern-lohnt-sich-eine-kapitalgesellschafts-oder-stiftungsholding-fuer-ihr-unternehmen","status":"publish","type":"post","link":"https:\/\/bbc-company.net\/en\/mehr-vermoegen-weniger-steuern-lohnt-sich-eine-kapitalgesellschafts-oder-stiftungsholding-fuer-ihr-unternehmen","title":{"rendered":"More Wealth, Less Tax: Is a Corporate or Foundation Holding Structure Right for Your Business?"},"content":{"rendered":"\n\n\t

Once a business reaches a certain size, many entrepreneurs ask themselves: Should I set up a holding company?<\/strong><\/p>\n

Simply put, a holding company is not a specific legal form but an organisational model. A parent company – the holding company – owns shares in one or more subsidiaries, meaning the operating companies.<\/p>\n

Important to know:<\/strong> A holding structure does not necessarily have to use a conventional corporate entity such as a German GmbH. A foundation, known as a Stiftung, can also serve as the apex of the holding structure and open up additional strategic possibilities.<\/p>\n

We have summarised the key advantages and disadvantages, as well as the potential of a foundation holding structure, for you.<\/p>\n

The Advantages of a Classic Holding Structure, for Example a GmbH Holding<\/h3>\n

The So-Called 1.5 Percent Effect on Participation Income<\/h4>\n

Under certain conditions, profit distributions from an operating GmbH to the holding company may receive favourable tax treatment.<\/p>\n

Under Section 8b of the German Corporate Income Tax Act:<\/p>\n

    \n
  • 95 percent<\/strong> of qualifying participation income is generally exempt at corporate level.<\/li>\n
  • 5 percent<\/strong> is treated as non-deductible business expenses.<\/li>\n<\/ul>\n

    This frequently results in an effective corporate income tax burden of around 1.5 percent<\/strong>. However, additional requirements may apply depending on the size of the participation and the trade tax treatment.<\/p>\n

    Tax-Advantaged Sale of a Company<\/h4>\n

    If the holding company sells an operating subsidiary, the capital gain may also benefit from favourable tax treatment under the applicable legal conditions.<\/p>\n

    The advantage:<\/strong> The capital can remain within the holding structure and be used for new investments or participations.<\/p>\n

    Enhanced Asset Protection<\/h4>\n

    Profits can be transferred from the operationally riskier business to the holding company.<\/p>\n

    This can help to:<\/p>\n

      \n
    • separate assets organisationally from day-to-day operations,<\/li>\n
    • distinguish more clearly between operating and asset-holding activities,<\/li>\n
    • reduce the direct exposure of assets to operational risks.<\/li>\n<\/ul>\n

      Attractive for Real Estate Investments<\/h4>\n

      The holding company can reinvest capital in real estate or separate property companies without first distributing the funds for private use.<\/p>\n

      Whether and to what extent tax advantages arise depends on the specific structure.<\/strong><\/p>\n

      The Next Level: The Foundation as a Holding<\/h3>\n

      If a foundation is placed at the top of the holding structure, additional strategic advantages may complement the tax aspects.<\/p>\n

      Protection Against Fragmentation<\/h4>\n

      The company can be separated from the family’s private assets on a long-term basis.<\/p>\n

      Depending on the structure, factors such as:<\/p>\n

        \n
      • divorce,<\/li>\n
      • inheritance disputes,<\/li>\n
      • private creditors<\/li>\n<\/ul>\n

        may be less likely to result in the fragmentation of the business.<\/p>\n

        Advantages for Business Succession<\/h4>\n

        A foundation can secure the continuity of the business across generations, regardless of whether individual heirs are able or willing to take over the management of the company.<\/p>\n

        Long-Term Inheritance Tax Planning<\/h4>\n

        German family foundations are subject to substitute inheritance tax, known as Erbersatzsteuer<\/strong>, which generally arises at 30-year intervals.<\/p>\n

        Forward-looking planning can help make long-term tax burdens in connection with succession more predictable.<\/p>\n

        The Disadvantages and Challenges<\/h3>\n

        A holding structure offers many opportunities, but it also involves additional effort.<\/p>\n

        Higher Ongoing Costs<\/h4>\n

        Every company within the structure requires:<\/p>\n

          \n
        • its own bookkeeping,<\/li>\n
        • separate annual financial statements,<\/li>\n
        • ongoing tax and administrative support.<\/li>\n<\/ul>\n

          A foundation also involves additional administrative and supervisory requirements.<\/p>\n

          Greater Formation Effort<\/h4>\n

          Depending on the initial situation, additional costs and requirements may include:<\/p>\n

            \n
          • notary fees,<\/li>\n
          • commercial register fees,<\/li>\n
          • capital requirements for further companies.<\/li>\n<\/ul>\n

            In the case of a foundation, the establishment process and sufficient asset endowment must also be taken into account.<\/p>\n

            Complexity of Private Cash Extraction<\/h4>\n

            The assets belong to the respective company or foundation.<\/p>\n

            If capital is to be used for private purposes, corresponding tax consequences may arise.<\/p>\n

            A holding structure is therefore primarily designed for long-term wealth accumulation and protection – not for rapid private consumption.<\/strong><\/p>\n

            Our Firm’s Conclusion<\/h3>\n

            The holding structure is the Swiss Army knife of wealth accumulation.<\/strong><\/p>\n

            Whether as a GmbH holding for tax-efficient reinvestment or as a foundation holding for long-term wealth and succession planning, the structure must be set up correctly from both a tax and legal perspective from day one.<\/p>\n

            Do you want to make your business and your wealth more resilient and future-proof?<\/strong><\/p>\n

            Let us assess together which holding model fits your objectives. Send us a message to arrange a tax strategy consultation.<\/p>\n\n","protected":false},"excerpt":{"rendered":"

            Once a business reaches a certain size, many entrepreneurs ask themselves: Should I set up a holding company? Simply put, a holding company is not a specific legal form but an organisational model. A parent company – the holding company – owns shares in one or more subsidiaries, meaning the operating companies. Important to know:…<\/p>\n","protected":false},"author":3,"featured_media":11933,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"slim_seo":{"title":"More Wealth, Less Tax: Is a Corporate or Foundation Holding Structure Right for Your Business? - BBC European TAX","description":"Once a business reaches a certain size, many entrepreneurs ask themselves: Should I set up a holding company? Simply put, a holding company is not a specific le"},"footnotes":""},"categories":[32,86],"tags":[78,75,72,160,55,74,73,77,45,166,161],"class_list":["post-11827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publications","category-tax-advisory-tax-structuring","tag-assetprotection","tag-businesssuccession","tag-corporatestructure","tag-familienstiftung","tag-familyfoundation","tag-foundationholding","tag-holdingcompany","tag-reinvestment","tag-steuerberatung","tag-taxadvisory","tag-wealthstructuring"],"_links":{"self":[{"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/posts\/11827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/comments?post=11827"}],"version-history":[{"count":2,"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/posts\/11827\/revisions"}],"predecessor-version":[{"id":11841,"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/posts\/11827\/revisions\/11841"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/media\/11933"}],"wp:attachment":[{"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/media?parent=11827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/categories?post=11827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bbc-company.net\/en\/wp-json\/wp\/v2\/tags?post=11827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}