Why set up a holding company? In essence, holding companies
are set up as an effective means of consolidating ownership of
operating subsidiaries. Deciding where to set up a holding company
is not always a tax driven exercise, but usually, a business
entrepreneur will seek the most tax effective means of
consolidating ownership of his or her operating
subsidiaries.
As aptly stated by Lord Tomlin in IRC v Duke of Westminster,
"every man is entitled if he can to order his affairs so that
the tax attaching under the appropriate Act is less than it
otherwise would be". Indeed, no taxpayer is obliged to pay
more tax than he can be compelled to, so a lot of structuring is
often resorted to in order to minimize the incidence of taxation.
The revenues flowing from such investment are considerable so it is
no wonder that there is increasing competition over which
jurisdiction can offer the best holding regime.
