Creating an international investment company makes it possible to structure shareholdings, financial investments, real estate assets, or several companies within a single structure.
But what is the best jurisdiction for an investment company?
There is no universal answer. The choice depends in particular on the nature of the investments, the shareholders’ country of residence, the desired level of regulation, taxation, banking requirements, and the intention to create a genuine international holding company.
For international entrepreneurs and investors, several jurisdictions may be considered, including Singapore, Hong Kong, the United Arab Emirates, the United Kingdom, and certain European jurisdictions.
The objective is not simply to seek the lowest tax rate, but to build a structure that is legally coherent, bankable, and suited to the investment strategy.
Why Create an International Investment Company?
An investment company can be used to hold different types of assets:
- interests in companies;
- shares and financial securities;
- real estate;
- interests in startups;
- intellectual property;
- international investments;
- operating subsidiaries.
A typical structure can be organized as follows:
Shareholders
↓
Investment Holding Company
↓
Shareholdings / Subsidiaries / Assets
For an investor with several investments, this structure can facilitate governance, the separation of investments, and the management of financial flows.
However, an investment holding company should not be confused with an investment fund or a company providing investment services to the public. In the latter cases, regulatory licenses and authorizations may be required.
What Is the Best Jurisdiction for an Investment Company?
Several jurisdictions have interesting characteristics.
| Jurisdiction | Profile | Main Advantage |
|---|---|---|
| 🇦🇪 United Arab Emirates | International investors | International environment |
| 🇸🇬 Singapore | Investments in Asia | Stability and credibility |
| 🇭🇰 Hong Kong | Asian shareholdings and investments | Territorial tax system |
| 🇬🇧 United Kingdom | International holdings and shareholdings | Legal and financial reputation |
| 🇨🇾 Cyprus | European holding company | EU environment and international structuring |
The final choice should be made based on the assets held and the investors’ tax residence.
United Arab Emirates: An International Jurisdiction for Investors
The United Arab Emirates have become an important destination for international entrepreneurs and investors.
The country can be attractive for establishing a holding company that owns shareholdings or certain international investments, particularly when the shareholders have a genuine presence in the UAE.
Since the introduction of Corporate Tax, the general rate is 9% on the portion of taxable income exceeding AED 375,000. Certain Free Zone entities may benefit from a 0% rate on their Qualifying Income when they meet the applicable conditions.
It is therefore essential to analyze the exact nature of the holding company’s income and its tax status.
The UAE are particularly attractive for:
- international entrepreneurs;
- family holding companies;
- investors residing in the UAE;
- interests in international companies;
- groups with activities in the Middle East.
Singapore: A Credible Holding Company for Asian Investments
Singapore is a particularly interesting jurisdiction for investors whose holdings are connected to Asia.
The country combines political stability, a structured legal environment, developed financial infrastructure, and a strong reputation among international investors.
The standard Corporate Income Tax rate is 17%. The tax regime also provides for certain exemptions and specific measures depending on the company’s circumstances.
For an international investment company, Singapore can be relevant when there is a genuine Asian investment strategy.
It may be suitable for a holding company owning:
- interests in Asian companies;
- startups;
- technology companies;
- financial investments;
- regional subsidiaries.
One of its main advantages is the jurisdiction’s credibility with banks and institutional partners.
Hong Kong: An Interesting Option for International Investments
Hong Kong can be particularly suitable for investors with interests in Asia.
Its territorial tax system is an important element of its attractiveness. For companies, the Profits Tax rate is 8.25% on the first HK$2 million of assessable profits under the two-tiered regime, and 16.5% thereafter.
However, the nominal tax rate alone is not enough to determine the actual taxation of a holding company.
It is necessary to examine in particular:
- the source of income;
- the shareholdings held;
- dividends;
- capital gains;
- rules applicable to foreign-sourced income;
- the shareholders’ tax residence.
Hong Kong can therefore be particularly attractive for investors wishing to establish an Asian investment platform.
United Kingdom: An Internationally Recognized Holding Company
The United Kingdom is another option to consider for an investment holding company.
The jurisdiction benefits from a mature legal environment and a developed international financial sector.
A UK company can, in particular, be used to hold interests in different businesses, subject to an analysis of the tax treatment applicable to the relevant income and transactions.
The main Corporation Tax rate is currently 25% for profits exceeding £250,000, with a 19% rate for small companies whose profits are £50,000 or less and a Marginal Relief mechanism between the two thresholds.
The United Kingdom can be particularly relevant when the priority is international reputation and compatibility with Western investors or business partners.
Cyprus: A European Solution for Holding Companies
Cyprus can also be considered for a European investment holding company.
Its position within the European Union, international financial sector, and business environment for international companies can make it an interesting jurisdiction for certain shareholding structures.
It may, in particular, be considered by entrepreneurs wishing to create a European holding company owning international investments.
The suitability of Cyprus nevertheless depends on the nature of the assets, the holding company’s income, and the shareholders’ tax residence.
Offshore Investment Company: Is It a Good Strategy?
The expression “offshore investment company” does not automatically mean a tax-free company.
A company located in a foreign jurisdiction may be subject to tax rules in several countries depending on:
- the company’s tax residence;
- the place of effective management;
- the location of the investments;
- the nature of the income;
- tax treaties;
- the shareholders’ residence.
Creating an offshore holding company solely to reduce taxation can therefore result in an inefficient structure or even generate additional tax obligations.
An international structure is generally more relevant when it serves a genuine economic purpose: geographic diversification, centralization of shareholdings, family governance, financing, or organization of an international group.
Investment Holding Company or Regulated Investment Company?
This distinction is essential.
An investment holding company may be used to hold the investments and assets of its own shareholders.
By contrast, a company that raises capital from external investors in order to manage their money may fall under a much stricter regulatory framework.
Before establishing a company, it is therefore necessary to determine whether the company:
- invests only its own capital;
- holds interests in companies;
- manages capital on behalf of third parties;
- provides investment advice or investment services;
- operates as an investment fund.
The regulatory requirements can be radically different depending on the business model.
How to Choose the Best Jurisdiction for an Investment Holding Company
Six criteria should be compared.
-
Nature of the Investments
Shareholdings, real estate, financial securities, startups, or intellectual property may require different structures.
-
Shareholders’ Residence
The personal taxation of investors can have a significant influence on the choice of holding company.
-
Taxation of Dividends and Capital Gains
It is necessary to examine the taxation of income received by the holding company and its subsequent distribution.
-
Tax Treaties
Treaties between the holding company’s jurisdiction and the countries where the investments are located can be decisive.
-
Banking and Financing
An international holding company must be able to receive and make significant payments while clearly demonstrating the origin and destination of funds.
-
Economic Substance
The structure must be consistent with its actual management. An international company without sufficient activity, governance, or economic justification may encounter tax or banking difficulties.
Which Jurisdiction Should You Choose for Your Profile?
Are You Mainly Investing in the Middle East?
The United Arab Emirates can provide an interesting base.
Are You Targeting Asia and Technology Companies?
Singapore can be particularly relevant.
Do You Have Investments in Asia and Want an International Platform?
Hong Kong deserves careful consideration.
Are You Looking for a Western Jurisdiction with International Recognition for Your Investments?
The United Kingdom can be a suitable solution.
Do You Want a Holding Company within the European Union?
Cyprus can be considered depending on the nature of the investments.
Why Seek Professional Assistance When Setting Up an International Investment Company?
The best jurisdiction for an investment company rarely depends on a single tax criterion.
The structure should be analyzed as a whole: shareholders, assets, investment countries, financial flows, taxation, banking, and regulation.
ICD Fiduciaries assists international entrepreneurs and investors with company formation, international holding structures, and the search for professional banking solutions.
The objective is to select a jurisdiction that is consistent with the investment strategy rather than creating a standardized offshore company.
FAQ – International Investment Company
What is the best jurisdiction for an investment company?
There is no universal jurisdiction. The UAE, Singapore, Hong Kong, the United Kingdom, and Cyprus may all be relevant depending on the assets, investors, and countries involved.
Can you create an offshore investment company?
Yes, but an offshore company remains subject to the tax and regulatory rules applicable in the relevant countries. The term “offshore” does not automatically mean tax exemption.
What is the difference between a holding company and an investment company?
A holding company generally holds interests or assets for its own account. A company that manages third-party capital or provides investment services may be subject to additional regulatory requirements.
What is the best jurisdiction for an international investment holding company?
Singapore and Hong Kong can be attractive for Asia, the UAE for international investors based in the Middle East, the United Kingdom for a recognized Western structure, and Cyprus for certain European structures.
Can an investment company own several businesses?
Yes. A holding company can hold interests in several companies, potentially located in different countries, subject to the applicable tax and regulatory rules.
Conclusion
The best jurisdiction for an investment company is the one that corresponds to the nature of the assets, the investors, and the international strategy.
The United Arab Emirates can be suitable for international investors seeking a base in the Middle East. Singapore is particularly credible for Asian investments.
Hong Kong can be attractive for investments connected to Asia. The United Kingdom offers a recognized Western jurisdiction, while Cyprus can be considered for certain European structures.
For the creation of an international investment company, the choice should therefore go beyond taxation. Banking, regulation, tax treaties, economic substance, and the shareholders’ residence are equally important.
