A holding company is a business that owns the stock of other companies in a way that allows it to control the decisions and policies of these companies. In other words, a holding company is the top tier in a hierarchy of companies.
A holding company can take one of a number of legal forms, and may be a corporation, a limited liability company or a limited partnership, depending on the jurisdiction and the aims of the company. A holding company is not obliged to own 100% of the subsidiary's stock — the actual percentage required is determined on a case-by-case basis, but the minimum is most often set at 50% + 1 share, i.e. the majority of shares. In some jurisdictions, the percentage of the stock owned by a holding company can influence tax procedures. In the USA, for example, a holding company must own 80% of its subsidiary's stock to be eligible for tax-free dividends and other tax benefits.
A holding company presents a certain benefit in that it is protected from losses. So, if one of the companies in which the holding company owns shares goes bankrupt, this loss does not affect the holding company. Holding companies also allow you to protect your confidentiality, as authority and decision making are centralised.
http://www.confiduss.com/en/services/incorporation/purpose/holding/
