Is your business growing and you already have several subsidiaries or entities in France, or plan to create one this year? Do you want to achieve external growth by buying another French company?
So you have certainly asked yourself the question of whether you should now also create a holding company...
To help you make your choice, here are several elements to know if you are expanding in France. Obviously, to go further, ask us! Our English-speaking Success Coaches will support you to answer your questions and implement the solution best suited to your growth objectives.
What is a holding company
In France, a holding company is a company that owns interests in other companies. It can be used as a management structure for ownership of different businesses, or as a way to diversify risk by investing in several different businesses. Holding companies in France allow you to protect your company's assets, to facilitate financial transactions and to optimize taxes.
A French holding company can be a publicly traded company or a private company. It can take different legal forms. They also exercise control over the companies they own by deciding on their strategy and management policy.
Why create a holding company? What are the advantages
The benefits of a French holding company may include better asset protection, as investments are generally separated from the company's operational activities.
Holding also provides greater flexibility for financial transactions, such as mergers and acquisitions. Finally, holding companies can reduce taxes by pooling the profits and losses of several companies.
Asset protection: By placing your French company's assets within a holding company, they are protected from the risks linked to your activity. For example, if the company goes bankrupt, the assets of the holding company will not be affected.
Risk diversification: by investing in several different companies through a holding company, a company will be able to reduce its exposure to risks linked to a single sector or a single company. This can be especially wise for businesses that are heavily reliant on a single product or service.
Investment portfolio management: A French holding company allows you to manage a diversified investment portfolio to spread risks and maximize profits.
Transmission of assets: The holding company in France also facilitates the transmission of assets from one generation to another. By placing your business assets in a holding company, they can be passed on more easily to your heirs without having to sell the business, for example.
Facilitating the acquisition of other companies: A holding company can be used to finance the acquisition of other companies using its own assets, without having to resort to debt. This prevents you from having to deal with high transaction costs or liquidity problems.
Cost reduction through centralized management: The holding company can be used as a centralized management structure for the companies it owns. This allows you to reduce your administrative and legal costs associated with managing multiple businesses and gain efficiency in managing each business separately.
Advantageous taxation: In certain cases, it may be tax advantageous to create a holding company rather than directly acquiring a company.
The steps for creating a holding company
To create a holding company , you must create a new company and "capitalize" it. It is also important to define the objectives of the holding company and plan the investments to be made.
Choose the legal form of the holding company: The holding company can be presented in different legal forms , such as a joint stock company or one partnership Limited by shares . It is important to choose the one that best suits your needs based on your size, structure and development strategy.
Choose a name for the holding company and check that it is available.
Draft the statutes of the holding company and determine the rights and obligations of the shareholders: The statutes of the holding company define its objectives, its structure and its operating rules. They must be drafted carefully to avoid any legal problems later.
Subscribe to the shares of the holding company and pay the share capital .
Register the holding company: You must declare it to the competent authorities, such as the commercial court registry the creation of your holding company (as with any company creation ). This involves completing and submitting official documents and paying related administrative fees.
Raising funds: To buy shares in other companies, a holding company needs funds. You can raise money by issuing shares or borrowing money from banks or other investors.
Acquiring shares in other companies: Once the holding company is created and has funds, you can start buying shares in other companies.
It is important to note that these steps may vary. Depending on the countries and jurisdictions, holding companies may indeed be subject to specific rules and regulations. It is therefore important to find out about the laws and rules in force before creating a holding company.
Obviously, your accountant is the first person you should ask for help. At Blendy , English-speaking French digital accountant, we support several of our clients on this specific growth issues. To find out how we support you and what type of structure to put in place to expand in France, ask our teams.
Expert in business management, our Success Coaches advise you on the choices available to you and support you at all stages, in particular to ensure that all legal and tax procedures are respected.
Contact us to find out how we can help you
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