A holding company is a company that owns shares in other companies, also known as subsidiaries. Holding companies are often used to control and manage a group of companies, or to protect assets from creditors and other legal claims. Holding companies can also be used to reduce tax burdens and improve financial flexibility.
One of the main benefits of using a holding company is that it allows you to separate the ownership of your assets from the management of your business. This can be useful for businesses with multiple subsidiaries, as it allows each subsidiary to be managed independently while still being part of the larger group.
Another benefit of using a holding company is that it can help to protect your assets from creditors and other legal claims. If a subsidiary is sued or becomes insolvent, the holding company's assets are generally protected.
Additionally, holding companies can be used to defer taxes on dividends received from subsidiaries.
Finally, holding companies can improve financial flexibility. For example, holding companies can borrow money and use the proceeds to invest in subsidiaries, or to provide financial support to subsidiaries in need.
Examples of Holding Companies
Some well-known holding companies include:
Alphabet (Google's parent company)
These companies own a wide range of subsidiaries in different industries. For example, Berkshire Hathaway owns subsidiaries in insurance, energy, and manufacturing. Alphabet owns subsidiaries in technology, media, and healthcare.
Holding companies can be a valuable tool for businesses of all sizes. They can be used to control and manage a group of companies, to protect assets from creditors and other legal claims, to reduce tax burdens, and to improve financial flexibility. However, it is important to note that setting up and maintaining a holding company can be complex and expensive, so it is important to seek professional advice before getting started.
Setting up a Holding Company
Setting up a holding company in Malaysia is a relatively straightforward process, but it is important to understand the key requirements and steps involved.
To set up a holding company in Malaysia, you must:
Be at least 18 years old
Have a residential address in Malaysia
Have at least one director who is a Malaysian resident
Have a company secretary who is a Malaysian resident
Have a registered office in Malaysia
Choose a company name. The company name must be unique and not already in use by another company. You can search for available company names on the Companies Commission of Malaysia (SSM) website.
Prepare the incorporation documents. The incorporation documents include the Memorandum of Association (MOA) and the Articles of Association (AOA). The MOA sets out the constitution of the company, including its name, objectives, and authorized capital. The AOA sets out the internal rules and regulations of the company.
Submit the incorporation documents to the SSM. You can submit the incorporation documents online or in person at the SSM office.
Open a bank account for the company. Once the company has been incorporated, you can open a bank account in its name.
Appoint a company secretary. The company secretary is responsible for ensuring that the company complies with all applicable laws and regulations.
Register the company with the Inland Revenue Board of Malaysia (IRB). The IRB is the Malaysian tax authority. You must register your company with the IRB so that it can be taxed on its income.
There are a number of benefits to setting up a holding company in Malaysia, including:
Asset protection. Holding companies can help to protect your assets from creditors and other legal claims.
Flexibility. Holding companies offer a great deal of flexibility in terms of how you structure your business.
Setting up a holding company in Malaysia can be a good way to structure your business and achieve your business goals. However, it is important to understand the key requirements and steps involved before you get started. It is also advisable to seek professional advice from a lawyer or accountant to ensure that you comply with all applicable laws and regulations.
How Bestar can Help
Bestar is a Malaysian-based corporate services provider that specializes in setting up holding companies in Malaysia. Bestar can help you with all aspects of the process, from choosing a company name to submitting the incorporation documents to the Companies Commission of Malaysia (SSM).
Here are some of the ways that Bestar can help you set up a holding company in Malaysia:
Company name search: Bestar can search the SSM database for available company names and help you to choose a name that is suitable for your business.
Company incorporation: Bestar can prepare all of the necessary incorporation documents, including the Memorandum of Association (MOA) and the Articles of Association (AOA). Bestar can also submit the incorporation documents to the SSM on your behalf.
Bank account opening: Bestar can help you to open a bank account for your holding company in Malaysia.
Company secretary appointment: Bestar can appoint a qualified company secretary for your holding company.
Inland Revenue Board of Malaysia (IRB) registration: Bestar can help you to register your holding company with the IRB so that it can be taxed on its income.
In addition to the above services, Bestar can also provide you with a range of other corporate services, such as accounting, tax compliance, and payroll services.
Here are some of the benefits of using Bestar to set up a holding company in Malaysia:
Convenience: Bestar can take care of the entire process for you, from start to finish. This can save you a lot of time and hassle.
Expertise: Bestar has extensive experience in setting up holding companies in Malaysia. Bestar's team of experienced professionals can help you to avoid any potential pitfalls and ensure that your holding company is set up correctly.
Affordability: Bestar offers competitive rates for its services.
If you are considering setting up a holding company in Malaysia, contact Bestar to discuss your requirements. Bestar can provide you with a free consultation and help you to choose the best services for your needs.