Holding formation: Process, costs and services at a glance - firma.de

Holding formation: Kickstart your enterprise with firma.de

Focus on your growing your business right from the start.

  • Get up and running as quickly as possible
  • Form your company without having to navigate German bureaucracy
  • Receive ongoing support from a dedicated consultant
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Our Holding packages: Tailored solutions for your formation

* Net price

Our Holding packages: Tailored solutions at fair prices

UG-Holding ClassicGmbH-Holding Classic
Services of firma.de
User friendly opening balance sheet template
Employment contract template (part-time)
Employment contract template (full-time)
Temporary personnel contract template
Internship contract template
Loan contract template
Freelancer contract template
Articles of association template
Managing director contract template
Letterhead, legal disclosure and invoice templates
Checklist for incorporation
Preparation of the commercial register (Handelsregister) application form*
Completion of the trade registration form (Gewerbeanmeldung)
Timely preparation of your Trade registration (Gewerbeanmeldung)
Coordination of all necessary legal formalities
Timely preparation of your tax office questionnaire (Finanzamtfragebogen) for the application of your VAT ID (USt.-ID)
Coordination of name check with IHK/HWK
Scheduling of notary appointment in your city of choice*
An expert consultant to guide you through the process
Referral to a qualified tax adviser in your area
Other services
Free 30-day trial of meineSCHUFA premiumOPTIONAL
Obligation-free insurance check by AXA
Obligation-free business address offer by REGUS
Digital handbook for founders: Firma gründen (currently only available in German)
698€ excluding tax738€ excluding tax
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Note:
* The notary fees and the costs for entry in the commercial register (Handelsregister) are not included in the price and will be charged separately.
** firma.de Firmenbaukasten AG does not provide legal advice itself but works exclusively with lawyers and independent tax advisers who specialise in the field of limited liability entrepreneurial companies. Please make an appointment: +49 611 17207-0 or by e-mail at support@firma.de.

Automate your GmbH formation with us

  • benefit-star

    Reduced tax liability

    By using a Holding structure, you can realise substantial tax savings. 95% of capital gains from the sale of shares or interests in subsidiaries are exempt from corporate tax. Only the remaining 5% are taxed at the regular tax rate.

  • benefit-coffee

    Liability advantages

    In the case of a business break-up, only the Holding's subsidiaries are liable. If the subsidiaries are the UG (haftungsbeschränkt) or the GmbH, the liability is limited only to their respective business assets.

  • benefit-speed

    Strategic PR

    A Holding gives you greater control over your brand’s public image by affording you the freedom to pursue different strategies through its subsidiaries.

Set up your business with firma.de in ten easy steps

  1. You authorise firma.de to set up your company.
  2. You receive expert advice from our consultants.
  3. We arrange a company name check for the parent company and its subsidiary with the Chamber of Commerce and Industry (IHK).
  4. We coordinate your notary appointment for the parent company in your city of choice.
  5. We arrange the opening of your company bank account.
  6. We handle the parent's company's entry into the commercial register (Handelsregister), while also preparing its trade registration (Gewerbeanmeldung) and tax office questionnaire (Finanzamtfragebogen).
  7. We coordinate your notary appointment for the subsidiary in your city of choice.
  8. We refer you to one of our tax adviser partners for an opening balance sheet (Eröffnungsbilanz) consultation.
  9. After the subsidiary's entry into the commercial register (Handelsregister), we will submit its trade registration (Gewerbeanmeldung) and tax office questionnaire (Finanzamtfragebogen).
  10. You're ready to do business!
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Customers share their experiences of firma.de

Frequently asked questions about Holdings

What is a Holding?

A Holding is a parent company with at least one subsidiary that it holds shares in. In many cases, the parent company owns 100% of its subsidiary.

In recent years, the Holding has increased in popularity as a corporate model, introducing innovative company structures to startup ecosystems around the world.

For example, if there is more than one founder, it may be feasible for each founder to set up their own Holding that holds shares in different subsidiaries.

What types of Holdings exist?

Operational Holding

Large-scale businesses typically use this kind of Holding. The Holding company itself is also an operating company, while the subsidiaries are branches. Within this structure, the parent company’s maintains tight control over its subsidiaries.

Management Holding

Within a Management Holding, the parent company issues directives to its subsidiaries about business strategy, capital flow management, and recruitment for management positions. Management Holdings often choose countries with attractive tax regulations to base their operations.

Finance Holding

Finance Holdings focus only on investment management rather than business oversight. In some cases, the parent company sets financial targets for its subsidiaries and functions as a corporate bank by providing capital.

Organisational or Structural Holding

This kind of corporation uses the Holding legal form as an organisational structure. Each subsidiary is a different department of the parent company.

Holding as a shareholder

Within this structure, the Holding acts as a regular shareholder, leaving the subsidiaries to manage their respective business operations autonomously.

This structure gives shareholders the tax benefits of a Holding without creating additional costs or increasing administrative burden.

How can you turn a holding into a tax saving scheme?

The Holding offers many tax benefits. For instance, if you transfer a subsidiary's profits to the Holding, 95% are tax-exempt — provided that the Holding holds a high enough share of the subsidiary (§ 9 Abs. 2a GewStG). The tax savings can then either be re-invested or paid out.

Tax benefits of the Holding also apply in the sale of subsidiaries. Such transactions only attract a 1.5 % sales tax.

Is the Holding liable for its subsidiaries?

Liability of a Holding structure's subsidiaries does not extend to the parent company. Thus, transferring profits from the subsidiaries to the parent company protects them from liability claims.

For non-Holding companies, the profits remain as company assets. In the case a liability claim, assets have no protection.

What are the PR benefits of the Holding structure?

A Holding gives you greater control over your corporation's public image by allowing you to pursue different strategies through its subsidiaries.

For example, if you sell different products via different subsidiaries, customers are unaware of the underlying company structure. You can achieve this effect easily by using trusteeships.

While one company is selling medium-quality products at a low price, another subsidiary can sell premium products at a high price without creating PR issues. This way you can avoid confusing consumers with regards to quality, pricing and brand image of your different product ranges.

Is it possible to set up a Holding by using an existing company?

Yes, it is possible to convert an existing company into a subsidiary of a Holding. However, if you want to sell the company and benefit from the tax advantage that Holding structures afford, you are going to have to wait seven years to do so.

If you sell the subsidiary before seven years have passed, the tax advantage is prorated. For example, if you sell a subsidiary after four years, the tax advantage applies to four-sevenths (57 %) of the selling price.

For total tax savings, the existing company must be integrated as a subsidiary in the Holding formation process.

What are the pros and cons of a Holding with split operations?

Unlike other corporate forms which are liable for damages with all company assets, the Holding's liability extends only to its subsidiaries - significantly reducing risk.

Shareholders enjoy further protection if the subsidiaries are limited liability companies (i.e. GmbH or UG).

Further analysis of split operations is below:

Pros

  • Distribution of operational risks among business units
  • Asset protection
  • Market entry with many companies and brands possible

Cons

  • Increased administrative costs from setting up multiple companies
  • Greater operational complexity and thus costs
  • Increased tax consultancy fees