The holding company serves a specific purpose. This purpose is often not to engage in direct activities but to hold external assets. These assets may be tangible and intangible and can include subsidiaries to create a group structure, real estate, Intellectual Property and Trademarks, art collections, and other valuables. Recently, the holding company is also used to open safety deposit boxes at financial institutions for safekeeping purposes. It shows that the holding company is a multi-purpose legal person.
In the current global business environment, a holding company can be incorporated almost anywhere. This flexibility provides the beneficiary with options to determine where activities, holdings but also matters of regulation, company law and privacy best fit the group activities and the place of residence of the beneficiaries. A holding company incorporated in an offshore financial center such as Dominica may meet the unique needs of the beneficiary.
International Business Companies (IBC) are defined as legal persons. Legal persons in common law jurisdictions are characterized by the separation between the legal entity and its controlling persons. Even in a group structure, where a holding company holds the shares in a subsidiary, legal persons remain isolated and cannot be addressed for the actions of other entities in the group by default. Court intervention and approval to pierce the corporate veil is needed to consider a group as one legal entity in legal disputes. This applies to both the beneficiaries as well as external parties. Staff members have duties against the company and not against its owners or other beneficiaries.
A Dominica holding company is like any other local legal person subject to the domestic company laws. However, foreign activities may not fall under the scope of the rules in Dominica. Therefore, the choice for appropriate foreign service providers, like banks and other financial institutions needs a close examination of the foreign rules for corporate establishment.
Holding companies are often seen as parent companies. When these companies hold the shares in subsidiaries, international companies acts oblige the company to hold periodic meetings to discuss important matters relating to the company. Consequently, holding companies have the right to appoint or remove company directors and discuss and influence the strategic direction of the company. When the holding company is not the only shareholder in the company, voting rights are proportionate and depend on the number of shares in possession.
Dominica Holding Company
International businesses willing to diversify their operations and mitigate several risk factors, can set up a Dominica Holding Company. The local and inviting corporate and legal infrastructure in Dominica allows international entrepreneurs to benefit from an efficient and effective environment to promote the overall success of the company. This is in line with good governance and other codes of conduct. A Dominica Holding Company is suitable for different purposes, but beneficiaries must consider the local laws in both the home and host countries of the group, its subsidiaries, holdings and beneficiaries. As a result a Dominica Holding Company enhances risk for poor management and limits responsibility when executed appropriately.
To incorporate a Dominica Holding Company and take advantage of a flexible and efficient corporate environment, please leave your contact details in the contact form below. One of our specialized representatives will respond to your enquiry accordingly.