The company that owns companies
Think of a Russian matryoshka doll. Inside the large doll is a smaller doll — and inside that an even smaller one. A holding company works the same way. It is a company whose main purpose is to own shares in other companies — not to produce goods or deliver services itself.
Berkshire Hathaway — Warren Buffett company — is the most famous holding company in the world. It owns shares in Apple, Coca-Cola, American Express and hundreds of other companies.
"The wise build systems that work for them — not just work hard themselves. A holding company is such a system."— Florence Scovel Shinn
Why use a holding company?
Tax advantage
The most important reason for most. Dividends and gains between Norwegian limited companies are almost tax-free. You can move money from the operating company to the holding company without paying tax — and reinvest the entire amount.
Asset protection
If the operating company goes bankrupt, the assets in the holding company are protected. It acts as a firewall between the business and your values.
Flexible investing
The holding company can invest profits in stocks, real estate or other companies — without paying tax on returns along the way. Money grows tax-deferred until you withdraw it privately.
Is a holding company for you?
A holding company provides the greatest benefits if you run a limited company with profits you do not need privately right away, want to invest the surplus, want to protect accumulated values, or plan to sell the business in the future.
Important: A holding company is not free — it costs money to operate an extra company with accounting and administration. Always talk to an accountant or lawyer before establishing a holding structure. This is general information — not tax advice.
"Great fortunes are not built on one good decision — they are built on many smart structures that work quietly in the background year after year."— Florence Scovel Shinn