A corporate holding structure has become a common approach in the corporate planning of family businesses and business groups. However, it is not always the most suitable option, especially in Catalonia, where the higher tax burden and the approach of the tax authorities require each structure to be analysed carefully.
There are alternatives to a corporate holding structure that allow you to organise the business, protect assets and plan succession without adopting a complex structure or taking on unnecessary tax risks.
The main options are outlined below.
Why a holding is not always the best option
A holding requires real economic activity, the effective exercise of management functions, a sufficient administrative structure and precise technical planning to maintain its tax advantages. If these elements are not met or properly documented, the structure may create more risks than benefits.
In Catalonia, an unnecessarily complex structure can also put exemptions at risk in Wealth Tax and Inheritance and Gift Tax, under the scrutiny of the regional tax authorities.
For this reason, before creating a holding, it is essential to assess whether there are more efficient alternatives aligned with the reality of the business.
A well-structured single limited company
When one company is enough
When there is a single operating business, with no subsidiaries or separate activities, one limited company may be sufficient. In these cases, creating a holding usually adds no value.
Key advantages
- Lower administrative and accounting costs.
- Clearer and more direct management.
- Lower tax risk.
Key factors for it to work properly
- Appropriate remuneration for shareholders working in the business.
- Clear separation between personal and business assets.
- Articles of association and shareholders’ agreements adapted to generational succession.
In many Catalan family SMEs, this is the most efficient option from both an operational and tax perspective.
Asset-holding company separate from the trading company
A practical alternative to the traditional holding structure
Instead of a holding, many families separate the business from the assets. The trading company carries out the activity, while an asset-holding company manages property or investments.
Advantages compared to a holding
- Isolation of business risk.
- Simpler structure.
- Greater control over assets.
Key considerations
- Risk of losing family business status.
- Impact on Inheritance and Gift Tax if there is no real economic activity.
- Frequent scrutiny of asset-holding companies.
- Higher taxation under Corporation Tax.
- Loss of certain tax advantages compared to personal income tax in some cases.
This is a common option when the business generates surplus profits and there is a need to protect them, provided it is structured with proper tax planning.
Succession planning under Catalan civil law
A specific advantage in Catalonia
Catalonia has civil law instruments such as succession agreements and donations mortis causa, which allow the transfer of a business or assets to be planned without resorting to complex structures.
What they offer as an alternative to a holding
- Advance planning of generational succession.
- Greater legal certainty.
- Reduction of family conflicts.
When they are useful
- Family businesses with a defined succession plan.
- Families prioritising continuity.
- Businesses with no plans to bring in external investors.
When properly aligned with tax planning, these instruments can replace part of the role of a holding. Each case requires individual analysis.
Family foundation as a complementary structure
Its potential role
A foundation is not a holding, but it can help organise assets or preserve a family legacy.
Key contributions
- Organisation of non-operational assets.
- Facilitation of donations with tax incentives.
- Continuity of the family project.
Limitations
- It cannot directly manage commercial businesses.
- Strict regulation by the Catalan government.
- High management costs.
It is typically used as a complement rather than a substitute for a holding.
Choosing the right structure based on real objectives
There is no single alternative to a corporate holding structure. The appropriate structure depends on the business, the assets, the shareholders and the succession plan.
In Catalonia, in many cases, less structure means greater security, provided there is coherent and well-documented planning. The decision should be tailored to the reality of both the business and the family.