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A GmbH holding structure can make sense in a variety of scenarios, depending on a company's strategic goals and circumstances. Here are some situations in which a limited liability company holding structure might be worthwhile:
Diversification and risk management:
When a company operates in different business areas, a holding company structure can help spread the risks among different subsidiaries. If one subsidiary runs into trouble, the other companies within the holding structure are less directly affected.Tax advantages: A holding structure may in some cases offer tax advantages, such as the ability to offset profits and losses within the group or benefit from holding company tax incentives. This may vary from country to country.
Strategic planning: if a company plans to develop or acquire different business units, a holding company structure can make the management and growth of these units more efficient. Each subsidiary can focus on its specific area of business.
Mergers and acquisitions: A holding company structure can make it easier for a company to acquire or merge with other companies. This can be done by purchasing shares or merging subsidiaries.
Financing: a holding company structure can make it easier to raise capital from investors or through debt financing, as the holding company acts as a monitoring and control entity.
Inheritance planning and succession planning: a holding structure can be used to organize and inherit assets and businesses within a family.
Internationalization: if a company is planning international expansion, a holding structure can help to efficiently organize the different business units in different countries and meet local requirements.
It is important to note that implementing a holding structure requires legal, tax and financial considerations. The pros and cons should be carefully weighed, and professional advice from lawyers, tax advisors and business consultants is usually advisable to develop the best strategy for your business.