It has become characteristic of large multinational companies to structure their business with both a holding and operating company. While an operating company enters into deals with either clients, suppliers and employees, a holding company typically controls any assets and subsidiaries. It also limits the existence of liabilities.
Holding companies normally administer and own an intellectual property portfolio of a common company group. This includes trademarks, patents, copyrights, designs and unpatented technology. The IP Holding company is a very useful tax planning instrument in some countries. Such companies generally derive income in the form of royalties. Generally, an IP holding company is suited for;
• Licensed investment services activities;
• Brokerage activities and commission income;
• Management and consultancy activities;
• International trading business;
• E-commerce activities;
• Licensed online gaming and betting activities;
• Ownership and licensing of patents, copyrights, trademarks, franchises, domain names and other intangible assets;
• Property ownership and project management;
• Ownership and leasing of machinery, foreign registered motor vehicles and trucks;
• Holding assets and investments of all kinds (intellectual property, real estate, shares and securities, bank accounts).
The Considerations of Setting up an IP Holding Company
The parent company, or the licensor, will own the IP and license it to subsidiaries. This ensures that valuable IP assets are safeguarded from the daily commercial activities of the operating company and licensee.
When setting up an IP holding company, it is imperative that one takes into consideration what royalties or fees to charge to the subsidiaries for the use of the IP. There must also be the insurance that such a company holds no other assets. The drafting, signing and implementing of license agreements between the IP holding companies and the subsidiaries is another factor which must be considered. Moreover, future intellectual property should also be included in any agreement, whether drafted or concluded. And, finally, it is important to weigh out any tax implications or stamp duties bound to stem from such a company’s establishment.
Here at Chetcuti Cauchi, our experienced team of lawyers will help you identify the main issues and guide through the process which needs to be taken.
It has become characteristic of large multinational companies to structure their business with both a holding and operating company. While an operating company enters into deals with either clients, suppliers and employees, a holding company typically controls any assets and subsidiaries. It also limits the existence of liabilities.
Holding companies normally administer and own an intellectual property portfolio of a common company group. This includes trademarks, patents, copyrights, designs and unpatented technology. The IP Holding company is a very useful tax planning instrument in some countries. Such companies generally derive income in the form of royalties. Generally, an IP holding company is suited for;
• Licensed investment services activities;
• Brokerage activities and commission income;
• Management and consultancy activities;
• International trading business;
• E-commerce activities;
• Licensed online gaming and betting activities;
• Ownership and licensing of patents, copyrights, trademarks, franchises, domain names and other intangible assets;
• Property ownership and project management;
• Ownership and leasing of machinery, foreign registered motor vehicles and trucks;
• Holding assets and investments of all kinds (intellectual property, real estate, shares and securities, bank accounts).
The Considerations of Setting up an IP Holding Company
The parent company, or the licensor, will own the IP and license it to subsidiaries. This ensures that valuable IP assets are safeguarded from the daily commercial activities of the operating company and licensee.
When setting up an IP holding company, it is imperative that one takes into consideration what royalties or fees to charge to the subsidiaries for the use of the IP. There must also be the insurance that such a company holds no other assets. The drafting, signing and implementing of license agreements between the IP holding companies and the subsidiaries is another factor which must be considered. Moreover, future intellectual property should also be included in any agreement, whether drafted or concluded. And, finally, it is important to weigh out any tax implications or stamp duties bound to stem from such a company’s establishment.
Here at Chetcuti Cauchi, our experienced team of lawyers will help you identify the main issues and guide through the process which needs to be taken.