In recent years, the holdings have become one of the most sought-after business structures in Brazil, both by business families seeking protection and asset succession, and by entrepreneurs and investors wishing to optimize taxes and consolidate their businesses.
But, after all, what is a holding company, how does it work in practice and how to open a holding company in Brazil safely and efficiently?
In this complete guide to CLM Controller Accounting, You'll have the opportunity to clear up all your doubts and take a closer look at the benefits this type of structure can offer your business.
What is a holding company?
The term holding comes from the English to holdwhich means “control” or “retain”. In practice, it is a company created to hold control or ownership of assets and holdings, which can be shares in other companies, real estate, investments and financial assets.
Unlike an operating company (which produces or sells something), a holding company generally has no direct commercial activity. Its role is to manage and organize the assets of individuals or companies, offering benefits in management, succession and taxation.
In other words, a holding company acts as the corporate umbrella for a family or business group.
Main types of holding
Before opening your own, it's essential to understand the different types of holding companies and their purposes. The ideal structure depends on the group's objective.
1. Asset holding
Created for concentrate and manage assets and property, such as real estate, vehicles, investments and stakes in other companies.
It is widely used to protect the personal assets of partners and family members against legal and tax risks. It also simplifies asset management and facilitates succession.
2. Family holding
Aimed at succession planning and organizing the assets of a business family.
The assets are transferred to the legal entity (the holding company), and the shares are distributed among the heirs.
This avoids probate, reduces the tax burden on inheritance and guarantees the continuity of family businesses.
3. Pure holding company
Has as the only activity participation in other companies, without performing any other operational or administrative function.
It is the simplest and most direct way of centralizing corporate control.
4. Mixed holding
In addition to controlling shareholdings, also carries out its own activities, such as providing services or renting property.
It is often used when there is a need to generate operating revenue within the structure.
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Why open a holding company
Setting up a holding company brings significant advantages for both individuals and corporate groups.
The main benefits include:
1. Tax planning
- Possibility of reducing the tax burden through the consolidation of results and taxation via legal entities;
- Distribution of profits exempt from income tax for members;
- Taking advantage of tax regimes more advantageous, such as Presumed Profit for holding companies;
- Greater tax predictability in relation to asset and revenue management.
Practical example: Instead of an entrepreneur paying up to 27.5% of IRPF on rents received as an individual, the asset holding company can collect approximately 11% to 14% in Presumed Profit, generating significant savings and totally within the law.
2. Asset protection
The holding company separates the personal assets of the partners from the assets of the operating companies. This creates a legal barrier against possible debts or risks of lawsuits.
In practice, assets such as real estate and investments are shielded from commercial risks and labor or tax claims from controlled companies.
3. Succession planning
With a family holding company, you can organizing succession during life, avoiding inventory.
The assets are transferred to the legal entity, and the shares are distributed among the heirs according to the rules established in the articles of association.
In practice, this reduces family conflicts, guarantees administrative continuity and reduces inheritance tax costs.
4. Governance and control
The centralization of assets and companies under a holding company makes it possible to more efficient management, with:
- Clear administration rules;
- Defined power structure;
- Corporate agreements that avoid disputes between heirs and partners.
5. Valorization and perpetuity
Family businesses that become holding groups increase their market value and become more attractive to investors, banks and funds.
In addition, the perpetuity of the business is strengthened, as succession and control are predetermined.
Step by step: how to open a holding company in Brazil
Next, take a look at practical and complete guide to structure your holding company legally, strategically and efficiently.
Step 1: Define the purpose of the holding
It all starts with planning. The first question that needs to be answered is: “Why am I setting up a holding company?”
Objectives may include:
- Protection of personal and family assets;
- Succession planning;
- Control of other companies (shareholdings);
- Tax optimization;
- Corporate reorganization of an economic group.
Defining the purpose is essential, because the type of company, the tax regime and even the contractual clauses will depend on that answer.
Step 2: Choose the type of company
In Brazil, holding companies usually take two legal forms:
Step 3: Structure the contract or articles of association
O articles of association (in the case of Ltd) or bylaws (in S/A) is the holding company's most important document.
It must contain specific and personalized rules for the purpose of the structure, such as:
- Management clauses (who decides what);
- Rules on the entry and exit of partners and heirs;
- No sale of shares to third parties without family approval;
- Criteria for succession and distribution of profits;
- Usufruct, incommunicability and reversion clauses (often used in family holding companies).
A well-drafted articles of association is what differentiates an effective holding company from a generic structure.
It is therefore essential that it is developed in conjunction with accountants and lawyers specializing in corporate planning.
Step 4: Define and pay in the share capital
Every company needs a initial share capital, which represents the amount contributed by the shareholders.
In the case of holding companies, this capital can be paid in with money or goods, such as real estate, shares in other companies, vehicles or investments.
For example: A family can set up a holding company with share capital made up of rental properties, which become the property of the legal entity.
In cases involving real estate, it is important to note:
- Need for asset valuation for accounting purposes;
- Possible incidence of ITBI (Real Estate Transfer Tax), although there are hypotheses of tax immunity when the transfer is made only for the payment of capital, without preponderant real estate activity.
Step 5: Register your company
With the articles of association drawn up and the capital defined, it's time to formalize the opening of the holding company.
The steps are:
- Business name consultation in Board of Trade;
- Drawing up and signing the articles of association;
- Registration with the Board of Trade or Legal Entity Registration Office (in the case of simple companies);
- Obtaining a CNPJ next to Receita Federal;
- Municipal and/or state registration, if applicable.
For pure equity holdings, usually no need for state registration, as there is no movement of goods.
Step 6: Choose your tax regime
The choice of tax regime is one of the most important decisions. The most common for holding companies are:
Presumed Profit
- Ideal for holding companies that manage their own assets;
- The calculation basis for IRPJ and CSLL is assumed to be 32% of revenue, which usually results in effective taxation between 11% and 14%;
- It requires regular accounting and the submission of declarations (such as ECD and ECF).
Real Profit
- Mandatory for holding companies with a turnover of more than R$ 78 million/year or complex activities;
- Taxes are calculated on the effective net profit, allowing tax losses to be offset;
- It requires complete bookkeeping and periodic auditing.
The ideal definition depends on the size, sources of income and purpose of the structure - something that should be done with specialized accounting support.
Tax outsourcing
The strategic solution for companies
Step 7: Regularize accounting and tax obligations
Even if the holding company has no operational activity, it must keep regular accounts and comply with all the ancillary obligations, among them:
- Complete bookkeeping (balance sheet, income statement and tax books);
- Delivery of ECD (Digital Bookkeeping) e ECF (Tax Accounting Bookkeeping);
- Issuing invoices if services are provided;
- IRPJ and DIRF declarations;
- Registration of corporate changes.
Maintaining regularity is fundamental to ensure the legitimacy of the structure e avoiding fines by the tax authorities.
Costs and deadlines for opening a holding company
The costs vary according to the type of company, the capital and the assets involved.
In general, they involve:
- Accounting and legal fees for structuring and drawing up the contract;
- Registration fees at the Board of Trade and notary's office;
- ITBI, if applicable in the payment of real estate;
- Asset valuations and accounting reports, when necessary.
The average time taken to complete the opening process usually varies between 15 and 45 working days, depending on the complexity and organs involved.
Example of a family holding company in practice
Imagine a family with four rental properties and shares in two companies.
Today, every asset is in the name of the parents, who are afraid:
- Heritage exhibition;
- Conflicts in succession;
- High tax burden on rent.
By creating a family holding company, All assets are transferred to the company.
The shares are divided among the children, and the articles of association establish the rules of succession and administration.
Results:
- IR on rents falls from 27.5% to around 11%;
- Assets are protected from business risks;
- Succession is settled without inventory.
Holding company maintenance and compliance
Once opened, the holding company should operate with accounting and fiscal rigor. Negligence can lead to problems with Internal Revenue Service, such as disqualification from the tax regime and assessments.
Good practices include:
Holding companies and family succession: the legacy that lasts over time
One of a holding company's biggest differentiators is its efficiency in succession planning.
Instead of allowing the transfer of assets and companies to take place only after the death of the patriarch or matriarch, which usually requires a legal inventory, high costs and long deadlines, a holding company makes it possible to organize this succession during life, with clear rules and total control over the fate of the assets.
The heirs become shareholders of the holding company, and not direct owners of the assets. This simplifies the transition, reduces inheritance taxes and avoid family conflicts.
In addition, the The articles of association may contain specific clauses, such as lifetime usufruct, incommunicability of shares in the event of divorce and governance rules that guarantee the preservation of family values and business continuity.
In this way, the family holding company not only protects the assets, but also ensures that the legacy built up over decades remains solid, well managed and in line with the will of the founders.
Conclusion: your holding company, your growth and protection strategy
Create a holding is one of the smartest ways to organize, protect and perpetuate business or family assets.
It saves taxes, guarantees legal certainty, facilitates succession and improves control over assets and companies.
With the right support, setting up a holding company in Brazil is a simple process safe, legal and highly advantageous.
A CLM Controller Accounting acts as strategic consultant throughout the process, from the design of the structure to ongoing accounting and tax management, ensuring that each stage is carried out safely and efficiently.
Do you want the benefits of a well-structured holding company?
Count on the expertise of CLM Controller Accounting to opening your holding company in a safe, strategic and optimized way.
Our specialized team offers complete corporate and tax planning consultancy, tailored to your profile and objectives.
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