Holding company: pros, cons — and when it makes sense

The three big advantages

• Tax-free dividends: if the holding owns at least 10% of the operating company, dividends can move up to the holding untaxed — and be reinvested from there
• Tax-free sale: sell the operating company and the gain is tax-free in the holding — tax is only triggered when you take money out privately
• Risk shielding: retained profits can be moved up to the holding, away from the operating risk

The drawbacks

A holding company is a separate company with everything that entails: its own CVR number, its own bookkeeping and its own annual report every year. That typically costs a few thousand kroner a year in administration — and a bit more complexity whenever money moves around.

With a modest profit and no exit plans, the value is limited.

When does a holding make sense?

• You expect to sell your business at some point
• You earn more than you spend privately and want to invest the surplus
• There are several owners — each holds through their own holding and can take dividends differently
• You want to spread risk across several operating companies

Practicalities: setting up and running it

If you found the holding and the operating company at the same time, it can be done with the same capital via a rolling contribution. If you already have an operating company, a holding can typically be added through a tax-free share exchange — it requires advice, but it's a well-trodden path.

At Numina we have a fixed holding package: bookkeeping and the annual report for the holding at a fixed yearly price, so the structure doesn't drown in admin.