International expansion is exciting, but the structure you choose in year one can either speed up every future decision or quietly slow you down with banking delays, tax friction, and governance confusion. A well-built holding company is not about looking “global.” It is about creating a clear, defensible control centre that makes growth easier.
What a holding company should do (and what it should not)
Your first international HoldCo should accomplish three things simply:
- Control: clean ownership of operating companies (OpCos) and key assets.
- Capital flow: a predictable route for dividends, funding, and exits.
- Governance: decision-making clarity for directors, investors, and banks.
What it should not do is become a dumping ground for random “just-in-case” entities. If you are tempted to add layers early, read this article first.
Step 1: Start with the blueprint, not the jurisdiction
Before you pick a location, write down a one-page “structuring brief”:
- Where will revenue be earned in the next 12–24 months?
- Who are the stakeholders (founders, family, external investors, employees with equity)?
- What must be ring-fenced (IP, real estate, higher-risk contracts)?
- What outcomes matter most (fundraising readiness, future sale, regional HQ, treasury control)?
- What does the banking story need to be (source of funds, source of wealth, expected flows)?
This brief becomes your filter, and it prevents the most common mistake: choosing a HoldCo location based on headlines rather than operational reality.
Step 2: Choose your HoldCo “seat” using five practical filters
A good HoldCo seat is not the place with the lowest headline tax rate. It is the place that stays stable under scrutiny. Use these five filters:
1) Legal certainty and corporate governance
You want predictable company law, enforceable shareholder agreements, and clear director duties. Investors care about this as much as tax.
2) Banking and onboarding reality
Many structures fail at the bank. If the ownership chain is complex or the business purpose is unclear, onboarding takes longer and costs more.
3) Treaty access and anti-abuse expectations
Treaty benefits are increasingly tied to commercial rationale and “substance.” OECD guidance on treaty abuse is a good baseline for understanding where scrutiny is heading.
4) Substance requirements and operating footprint
A HoldCo is easier to defend when it has real governance: board meetings, decision records, qualified directors, and a credible operating rationale.
5) Future-proofing for global tax changes
If your group may scale significantly, model how global minimum tax rules and local anti-avoidance rules could affect the benefits of a classic holding setup.
Step 3: Build the structure in three clean layers
For most founder-led groups, a practical first structure looks like this:
Layer A: HoldCo (control and governance)
- Owns shares in OpCos
- Holds shareholder agreements
- Sets group governance, approvals, and treasury policy
Layer B: OpCos (revenue and local compliance)
- Each market has an OpCo that signs customers, hires staff, and invoices locally
- Clear separation reduces permanent confusion around “which entity does what”
Layer C: Asset vehicles (only if there is a real reason)
- IP, real estate, or a joint venture SPV can make sense, but only with documentation and substance to match
The goal is defensibility. If you cannot explain each entity in one sentence to a bank or investor, it is usually too early to have it.
Step 4: Treat substance and governance as a design requirement
Substance is not just office space. It is proof that strategic decisions are made where you say they are made. In practice, that means:
- A board or manager who actually approves key items (budgets, funding, major contracts)
- Meeting minutes and resolutions that match real timelines
- Clear signing authority and delegation rules
- Contracts and intercompany agreements that reflect reality, not templates that never get followed
This is also what makes exits smoother. Buyers and investors diligence control, not just numbers.
Step 5: Model cash movement early (this is where many structures break)
Most founders plan structure around ownership, then later discover that cash cannot move cleanly. You should model:
- Dividend routes and likely withholding taxes
- Funding mechanics (equity vs loan, repayment terms, FX exposure)
- Intercompany charges (management fees, cost recharges, royalties) with transfer pricing logic and documentation
- Where profits will sit in practice, not just on paper
If the model is unclear, the structure is not ready.
Step 6: Build a “bank and investor ready” pack from day one
International HoldCos attract higher diligence. Prepare a standing file that includes:
- Ownership chart to beneficial owner level
- Business narrative and commercial rationale for each entity
- Financial projections and expected flows
- Key contracts, invoicing flows, and source of funds documentation
- Governance calendar (renewals, filings, audits, tax submissions)
This single discipline reduces delays across banking, fundraising, and expansion.
Structure Smarter with Encor Group
Encor Group helps founders and growth-stage businesses design international structures that are clear, scalable, and defensible, then supports the execution with corporate structuring and business setup, tax and accounting, compliance, corporate bank account opening support, payroll, HR and recruitment, and advisory services. If you want a practical review of your current setup or a blueprint for your first HoldCo, reach out here.