Whether expanding a business, preparing for an acquisition, investing in commercial property or planning for the handover of the business: as a company grows, the challenges facing its leaders evolve.
For many business leaders, the question of how to structure their business assets eventually arises. It is often at this point that the concept of a holding company comes into play.
Long seen as a tool reserved for large corporations, the holding company is now used by many SMEs, self-employed professionals, franchises and family businesses. When well-designed, it can become a real driver of growth, protection and optimisation.
What is a holding company?
A holding company is a company whose main purpose is to hold shares in other businesses.
In practical terms, instead of holding shares in your operating company directly, you hold them through a parent company known as a holding company.
This structure creates an organisation comprising a parent company and one or more subsidiaries. The subsidiaries carry out the operational activities, whilst the holding company oversees the group’s strategic, financial and asset management decisions.
Let’s take the example of a business owner who runs a construction firm, a property development business and a property investment company (SCI) that owns their business premises. A holding company can enable him to bring all these activities under a single controlling structure.
Why are holding companies becoming increasingly popular with business owners?
In 2026, business owners are seeking greater flexibility to invest, secure their assets and prepare for the future of their business.
A holding company meets these objectives precisely.
In particular, it allows profits from subsidiaries to be channelled back to the parent company under particularly favourable tax conditions.
This cash flow can then be reinvested in new projects without the need for a dividend distribution to the director.
For an entrepreneur wishing to finance external growth, acquire a competitor or invest in commercial property, this capacity for reinvestment is a considerable advantage.
A powerful financial lever to accelerate growth
One of the main advantages of a holding company lies in its role as a financial lever.
In the context of a takeover or acquisition, the holding company can act as the purchasing vehicle. It takes out a bank loan and then acquires the shares of the target company.
The profits generated by the acquired company are then used to gradually repay the debt incurred for its acquisition.
This mechanism, often referred to as an LBO (leveraged buy-out), enables a director to take control of a larger company whilst limiting their initial personal investment.
For banks, a well-organised group structure is also a reassuring factor that often facilitates access to financing
A tax regime conducive to reinvestment
The holding company is also a tool for optimising the group’s cash flow.
When a subsidiary pays dividends to its parent company, almost all of these sums can be repatriated at a very low tax rate. The aim is not to avoid tax but to minimise tax friction when an entrepreneur wishes to reinvest profits back into the business.
This strategy makes it possible, for example, to finance a new project, acquire another company or develop a complementary business without drawing on the director’s personal funds.
Another advantage: when a group comprises several companies, certain mechanisms allow the profits of one company to be offset against the losses of another, thereby improving overall tax management.
An effective tool for protecting your business assets
A holding company also offers significant legal benefits.
Each business activity can be separated into a distinct company. Should a subsidiary encounter difficulties, the other entities within the group are generally protected.
This structure makes it possible, in particular, to separate strategic assets from operational risks.
Many business leaders therefore choose to place their business property within a dedicated structure in order to protect this essential asset in the event of economic uncertainty.
An asset for preparing the business succession
For business owners planning to hand over their business in the coming years, the holding company can also play a central role.
Certain structures known as ‘operating holding companies’ enjoy significant advantages in the context of family succession.
However, the tax authorities are paying increasing attention to the actual business activities carried out by the holding company. It is no longer sufficient to simply set up a parent company on paper. The company must demonstrate its effective involvement in the management and running of the group.
This development makes tailored support essential to safeguard the business owner’s wealth management strategy.
What about private individuals?
For private individuals, setting up a holding company can also be beneficial in certain contexts relating to wealth management or the holding of shareholdings.
However, the advantages are generally more limited than for a business owner with several companies or a structured development project. The suitability of this arrangement therefore depends heavily on the individual’s personal circumstances, wealth management objectives and investment prospects.
The holding company: a tool to be tailored to each project
A holding company is neither a miracle solution nor a standard arrangement applicable to all businesses.
However, when structured around specific objectives, it can become a genuine growth accelerator, a tool for protecting assets and an effective means of business succession.
As every situation is unique, it is essential to examine the financial, tax and legal implications before setting one up.
Are you planning to expand your group, acquire a business or prepare for succession? Our teams can assist you in assessing the suitability of a holding company and building a structure tailored to your objectives.
