Incorporating a BV
Once you have a BV, you quickly start hearing about holding companies. Everyone with a bit of business experience seems to have one. But what exactly is it, and do you need one? In this article we explain it without the complicated terms.
A holding company is simply a BV that owns shares in another BV. You then have two companies.
The holding company: also called the parent company. This is the BV you own personally. The holding company in turn owns the shares of your operating BV.
The operating BV: also called the subsidiary. This is the company you work in daily, where revenue comes in and costs are made.
You as a person are therefore one layer removed from the operational business. That sounds cumbersome but it has a number of concrete advantages.
This is the most practical reason. Say your operating BV runs into financial trouble. Creditors can then come after the assets of the operating BV. But if your savings and reserves are sitting in the holding company, those are in principle protected.
You build up profit in the operating BV, periodically move it to the holding company and keep the operating BV relatively lean. That way you protect built-up wealth against risks in the day-to-day business.
Profit moving from the operating BV to the holding company is, under certain conditions, tax-free thanks to the participation exemption. That means you can accumulate profit in the holding company without immediately paying Box 2 tax on it.
You only pay tax when you actually take the money out to your personal account. Until then, the wealth in the holding company grows without additional tax pressure.
Want to sell your operating BV one day? Then a holding company is almost always smart. The proceeds from selling the shares in your operating BV land in the holding company and are tax-free thanks to the participation exemption.
Without a holding company, you pay Box 2 tax (24.5% or 31%) directly on the capital gain as a shareholder. With a holding company, you can leave the money in there tax-free and reinvest it or distribute it at a later moment.
Do you have multiple business activities? Then you can put each activity in a separate operating BV under the same holding company. That way the risks of one activity are separated from the other.
Say you have a consultancy and a rental business. If the rental business runs into trouble, the assets of the consultancy are in principle safe because they sit in a separate BV.
Despite all the advantages, a holding company is not always necessary. Bear in mind that:
If you are just starting out with a BV and your profit is just above the tipping point, simply start with one BV. Add a holding company later when your business grows and you start building up wealth.
You incorporate two BVs at the same time with the notary: the holding company and the operating BV. The holding company receives the shares of the operating BV. You as a person are the shareholder of the holding company.
Sarabel guides the entire incorporation process. Get in touch at info@sarabeladministratie.nl for a tailored quote.
Yes, you can. That is called a restructuring. You transfer your existing BV into a new holding company via a silent contribution. It is more work than starting with a holding structure straight away, so if you think you might want one eventually, it is often smarter to do it right from the start.
A holding company makes sense if you want to protect your wealth, defer tax, sell your business one day or separate multiple activities. Not relevant yet? Start with one BV and add the holding company when it makes sense.
Have questions about your specific situation? Send an email to info@sarabeladministratie.nl.