A pure holding company (reine Holdinggesellschaft) is a Swiss company whose exclusive or principal activity is holding equity stakes in other companies, without conducting its own commercial or industrial activity. It differs from a mixed holding (combining equity holdings and operational activity) and from a domicile company (whose main activity is intra-group relationship management).

Following the 2019 TRAF reform which abolished preferential cantonal tax regimes, pure holdings remain fiscally attractive in Switzerland through: the participation relief (Beteiligungsabzug) virtually exempting dividends from subsidiaries held above 10% and capital gains on participations held over one year, tax-free distributions via capital contribution reserves (RAP), and very low capital tax rates in certain cantons. A prior tax ruling is recommended to confirm the applicable tax treatment.

In M&A transactions, the pure holding is frequently used as the acquisition NewCo or as the group head in an international Franco-Swiss structure.

Example: a Geneva family office structures its Franco-Swiss SME investments through a pure Vaud holding. Dividends received (CHF 800,000/year) benefit from participation relief — effective tax less than CHF 10,000. Capital gains on stake disposals (after 1 year holding) are exempt. Capital tax: CHF 5,000/year (0.05% × CHF 10M equity). Total fiscal burden below 1.5% of income.

At Hectelion, we advise on Swiss pure holding structures in our financial structuring and Franco-Swiss wealth optimisation mandates.