swiss tax law

Swiss holding company

Holding companies in Switzerland


The Swiss holding is either a foundation or a corporation (SA or SARL) whose principle function is the long term management (minimum one year) of a group of affiliates from different companies based in Switzerland or abroad.
For a company to attain the status as a Swiss holding company, one of the two following conditions must exist:
  • The holdings must represent at least two thirds of total assets;
  • The yield must represent at least two thirds of total revenues.
Federal law on the harmonization of direct taxes (LIHD) requires that one of the two previously stated criteria must fulfilled. Simply reporting the objectives in the articles of incorporation is not sufficient.
Swiss holding companies enjoy tax relief and, in order to avoid double taxation, they are exempt from income tax and enjoy a reduced capital tax rate. The capital which is subject to tax is defined (by the LIHD) as total paid up social capital.
Swiss holding companies are prohibited from carrying out any trade, manufacturing or business activity.
Only “judicious and effective” management activities are authorized such as:
  • Currency conversion or foreign currency operations
  • Managing the assets of the group
  • Managing the intellectual property owned by the companies of the group.