Incorporating as a holding company is often undertaken to make business management more efficient, increase access to investment capital, and to reduce the overall tax burden of a business. Holding companies do not get involved into the day to day business operations of its subsidiaries, opting instead to limit their activities to holding and managing investments of property, stock and other assets. Shareholders invest directly in the holding company by buying shares, and do not invest into the individual subsidiary companies.

Forming holding companies is an option many business owners take into serious consideration as their ventures grow; especially if they decide to issue common shares of their companies to the public through a stock exchange. Starting a holding company can be a way to simplify the complexity and risks of managing a large group of companies.

This is achieved by creating an umbrella entity that deals with every subsidiary company's banking, legal, property and investment interests, while the subsidiaries themselves concentrate on their core business functions.

As the world grows more interconnected barriers to capital movements are quickly being eliminated, making tax differences the biggest factor to be concerned about when trading between different jurisdictions. As taxes can have a significant effect on business decisions, setting up investment structures like holding companies can be an excellent way of reducing tax leakage.

Registering your international holding company in the UK carries with it many benefits. The headline corporate tax rate of the UK is the lowest of any major world economy, and generous interest relief provisions are in place to decrease taxable profits, making the effective tax rate even lower than it appears on paper. The UK also has the largest number of double taxation treaties of any country in the world, giving your business unprecedented coverage in protecting its overseas assets.

With all these local incentives and international tax treaties in place, the UK currently offers the biggest bang for your buck when it comes to extracting overseas dividends at the minimum cost.

When you incorporate your UK holding company with Fast Formation, you can take full advantage of our network of experienced corporate tax planners and financial accountants to help your business use current UK and EU tax laws to its advantage.

If you are thinking about setting up a holding company in the England, Wales, Scotland or Northern Ireland, do not hesitate to get in touch with our experts at Fast Formation. Not only do we make the whole registration process as simple and transparent as possible, we also offer a range of value added business services to make running your UK based holding company easier.