Holding structures for international business

An Austrian holding is rarely chosen for its exotic appeal. It is chosen for dull but solid reasons: the jurisdiction's reputation, an extensive tax treaty network, and rules that do not change every two years. But that same holding becomes a problem if it exists only on paper.

What a holding structure provides

Dividends from subsidiaries within Austria flow to the holding without additional tax. For foreign participations, the international participation exemption applies: with a stake of at least 10 % and a holding period of at least one year, both dividends and, under certain conditions, gains from the sale of a participation are exempt. This allows reinvestment within the group rather than after taxation at every step.

The second effect is group taxation: losses of one group company are offset against the profits of another. The third is a simpler exit: a stake in the holding is sold rather than individual assets across multiple countries.

Substanz — the primary condition, not a formality

The benefits apply as long as the structure has real substance: a place where decisions are made, a director who genuinely manages, premises, documented meetings, and costs that correspond to actual activity. An empty shell with a mailing address is the fastest route to the reclassification of the entire arrangement and back-assessments covering several years.

When a holding is not needed

If you have one operating company and one owner, a holding adds costs and reporting obligations without adding anything of substance. It becomes relevant with a second jurisdiction, with partners holding different stakes, with a plan to sell or bring in an investor. Until that point, a simpler structure is usually both more straightforward and less expensive.

Our working approach: first describe how money moves over two years, and only then decide whether another company is needed in between. The structure should serve the business — not the other way around.