What is a wealth holding company and how does it help with wealth management?

A equity holding is a company created to manage and administer the assets of a family or a group of investors. 

Its purpose is to protect and maintain assets in an organized and strategic manner, ensuring that they are preserved and grow over time. 

In today's text, we will present more details about how it works, the main benefits, differences between pure and mixed holding companies, among other questions on the topic.

So, follow along to stay updated. 

What is a holding company?

One equity holding It is a company that has a corporate structure that allows control of the assets and assets accumulated by the family or individual. 

Its main function is to manage these real estate, financial and business assets in the most appropriate way to preserve and enhance the value of the asset. 

The equity holding company is normally established as a corporation (S/A) or a limited liability company (Ltda.), and its main function is to hold shareholding or corporate control of other companies or assets. 

The assets are transferred to the holding company, which then manages them, aiming to protect the assets from risks, such as lawsuits, debts or family disputes.

In addition to asset protection, the holding company can also be used for succession planning and tax, allowing better management and transfer of assets to future generations, as well as optimization of the tax burden, depending on the legislation in force in the country in which it is established.

It is important to highlight that the constitution and management of a holding company may involve complex issues related to tax, corporate and inheritance legislation.

Therefore, it is recommended to seek the assistance of specialized professionals, such as lawyers and accountants, to ensure that the structure is suited to the specific needs and objectives of each situation.

How does it work?

It acts as an intermediary between the assets and management. In other words, the holding company becomes the owner of all the family's assets. 

This ensures that the company has full control over its assets and a separation of assets, facilitating, for example, the sale of assets without compromising asset control. 

In addition, it may own shares in other companies, adding value to the investor group's assets.

It is still possible for this company to have its own tax planning, from which financial operations can be carried out with the aim of reducing the tax burden, generating less outlay and greater financial return.

What are the main benefits of the asset holding company?

Among the main benefits that this organization offers is the ease of managing assets accumulated over time. 

Management is more organized, in addition to ensuring better protection of assets, it helps to guarantee the family's future financial security. 

In addition to these, we can cite some more examples below:

1. Protection of patrimonial assets

It allows the separation between personal and business assets, providing greater protection for the family's personal assets. 

This is because, in the event of bankruptcy or debts, only the company's assets will be affected. 

2. Succession planning

Through the equity holding It is possible to carry out adequate succession planning, so that, in the event of the death of the holding company owner, the succession of his assets is carried out in an easy manner and without much bureaucracy. 

Furthermore, this process avoids family conflicts and ensures the protection and preservation of assets, in addition to business continuity.  

3. Tax reduction

The holding company allows for the possibility of various tax planning strategies, enabling the reduction of taxes to be paid by the company.

One example is that the profits of subsidiary companies can be reinvested in the structure itself, without the need for dividend distribution. 

This can result in significant savings in terms of income tax and other taxes.

4. Flexibility in administration

It can also be properly structured to allow efficient management of real estate assets, with greater flexibility and security. 

5. Deduction of expenses

A equity holding can be used to deduct expenses, such as legal and accounting fees, that are related to asset management.

This deduction can help reduce your income tax base. 

6. Possibility of using tax incentives

Another tax advantage that this structure offers is the possibility of using tax incentives. 

Depending on the country and local tax laws, a equity holding may be eligible for tax incentives, such as exemption from taxes on the transfer of goods and assets between companies with the same structure.

7. Access to credit lines

The holding company may also allow different types of financing e loans without the need to use the offering of personal assets as collateral. 

8. Organization and centralization

It is also worth highlighting that it centralizes all of the company's financial activities, providing a more efficient organization of resources and greater transparency. 

9. Ease of buying and selling goods

Buying and selling of real estate and other properties is also facilitated in this organization. 

The process, in turn, can be simpler and faster, without the need for the involvement of third parties or intermediaries.

It is important to highlight that the advantages, including tax advantages, equity holding, must be transitory on a case-by-case basis, considering the particularities of each country's tax legislation and the specific needs and objectives of each situation.

What is the difference between a pure holding company and a mixed holding company?

A very common question among investors is What is the difference between a pure holding company and a mixed holding company? 

In short, the pure holding It is characterized by being a company whose exclusive objective is to participate in other companies, controlling or not, to manage assets and increase its results. 

On the other hand, the mixed holding aims at the participation of other companies, but is also dedicated to other business activities, such as, for example, providing services and manufacturing products.

How can a holding company help with business succession?

Business succession is a challenging process for many entrepreneurs. 

When it comes to transferring ownership and control of a business from one generation to the next, many challenges can arise, including a lack of adequate preparation, conversations about the future of the business, and the potential for family conflict. 

This is where a equity holding can be extremely useful.

It is a company that owns and controls other companies. Therefore, it is used to protect a family's assets by ensuring that they are held in a legal vehicle that can be managed and protected more effectively. 

Furthermore, there are many advantages to using it to facilitate business succession. 

First, it can provide a clear framework for transferring ownership and control of the company. 

This can help avoid family conflicts and ensure the process runs smoothly and transparently.

Other than that, a equity holding can help protect family assets. 

By placing assets in a holding structure, the family can protect them from creditors and other risks. This can help ensure that the family business and assets are preserved and available for future generations.

This tool can also help ensure that the business is managed effectively and professionally, regardless of who is in control.

This can certainly help ensure the company's continuity and protect its long-term value.

In short, a equity holding can be a valuable tool to facilitate business succession. 

It can provide a clear framework for transferring ownership and control of the business, help protect family assets, and provide a structure for managing the business. 

If you are facing the challenge of business succession, a holding company may be the solution you need to ensure your company and its assets are protected and available for future generations.

How can a wealth holding company protect family assets?

By now, you already understand the importance of this company in protecting your assets. However, we have set aside this topic to explain this subject a little further. 

This way, you will be able to understand more clearly the different ways in which the holding company can protect family assets. Take a look!

The first point to observe is the investment diversification. It can invest in different sectors and asset classes.

Thus reducing the exposure to risks of a single investment. 

Another way it protects assets is through succession planning, a point that has already been addressed in this text.

Continuing, we will highlight the protection against creditors, a point that has also been addressed in this text. 

In short, the holding company can separate the personal assets of family members from the company's assets, ensuring greater protection against lawsuits.

A professionalization of management It is also a strategy used by this company to protect its assets.

She can hire professionals to manage the business, reducing dependence on family members and ensuring more efficient management.

Finally, we would like to highlight the incorporation of legal protections. A equity holding may incorporate protective clauses into its bylaws, such as limiting shareholders' liabilities. 

With these initiatives, it guarantees additional protection for family assets. 

Conclusion

Finally, for investors and families seeking security, organization and profitability for their assets, they can count on equity holding as a great strategy for asset management. 

However, it is essential to consult qualified professionals to support decision-making, which also involves:

• financial management planning;
• tax planning.

Certainly, aiming to maximize results, thus generating growth and financial security for the family in the long term.