Management Company (Gesco)

A holding company (often called a Gesco) is a company whose primary purpose is to hold assets, such as shares in another company, investments, or real estate, rather than to sell products or services itself. It is used to shelter accumulated profits and defer taxation.

Brief

Its purpose: to hold assets (stocks, investments, real estate), not to run a business on a daily basis.
It often oversees your operating company (the company that actually makes the sales).
Profits can be transferred from one to the other, usually without immediate tax.
It protects your surplus (accumulated money) and helps with retirement and inheritance planning.

Why does this matter?

Imagine two drawers: your day-to-day business (the operating company) earns more money than you take out to live on. This money sitting idle remains vulnerable if a client sues you or if an invoice goes wrong. A Gesco acts like a separate safe: surpluses are transferred to it, generally without immediate tax, and then you invest them or prepare for your retirement at your own pace. It's not magic: a second company means two sets of financial statements (the annual financial snapshot of the business), two sets of tax returns, and complex regulations. Bankeo will introduce you to a certified accountant, experienced in corporate taxation, free of charge, to see if it's worthwhile for you, and we'll be there to support you every step of the way.

Frequently asked questions

What exactly is a management company?

It's a company that doesn't sell anything itself: it serves as a safe for holding assets, such as shares in your main business, investments, or real estate. Many entrepreneurs place it above their company, which handles the sales, in order to protect the accumulated capital.

Does a Gesco really allow you to save on taxes?

Its main purpose is to defer personal income tax, not eliminate it: surpluses are generally transferred back to the Gesco without immediate taxation and accrue interest until you need them. Be aware: a poorly structured plan can cause you to lose a significant tax advantage when selling the company (an exemption that reduces capital gains tax on the sale of shares). This requires advance planning.

How can I know if a Gesco is worth it for me?

You need to compare the benefits (tax deferral, protection of your surpluses) with the annual costs: second accounts, second tax returns, and fees. The calculation is different for everyone. Bankeo provides you with a free, audited accountant who provides a clear assessment with real figures, at no cost to you, and we remain by your side throughout the process.