Structuring one group across Germany, Switzerland and Austria

Where the holding sits

For founders personally resident in Germany, a German holding GmbH is usually the pragmatic apex: dividends and share-sale gains from subsidiaries arrive effectively 95% tax-free (§8b KStG), the participation regime is settled law, and you avoid the exit-tax complications (Wegzugsbesteuerung) that a foreign holding can trigger for German-resident shareholders.

A Swiss holding becomes interesting when the founders are - or are becoming - Swiss residents, or when the group's center of gravity is genuinely Swiss: cantonal participation relief brings the effective rate on holding activity near zero. What rarely works is the fantasy version — a Swiss letterbox above a German operating business with no Swiss substance. Both tax offices see through it, and the German CFC and treaty rules are built precisely for that case.

Substance: what each entity must actually have

Substance is the word auditors use for 'is this company real where it claims to be'. A defensible group gives every entity what its function needs: the operating companies have local staff or contracted management, premises appropriate to their role (a registered address with services can be enough for a pure holding; it isn't for a sales company booking millions), local bank accounts, and decision-making that demonstrably happens where the entity sits — documented board minutes, not just a register entry.

The Swiss entity additionally needs its resident director; the Austrian entity its Firmenbuch-registered management. None of this is exotic — it's a checklist — but it must exist before the first audit letter, because retrofitting substance is exactly what tax offices don't accept.

Inter-company contracts and transfer pricing

The moment two group companies transact — the German entity licenses software to the Austrian one, the Swiss entity charges management fees — you are in transfer-pricing territory. The rule in all three countries is the same OECD arm's-length principle: price it as if the parties were strangers, and be able to show your working.

In practice a founder-sized group needs three documents: written inter-company agreements for every recurring flow (services, licenses, loans, cost sharing), a short transfer-pricing memo justifying the pricing method, and consistent invoicing that matches both. Germany requires formal documentation on request within 30 days; Austria and Switzerland have their own thresholds. Small groups rarely need economist-grade studies — they need consistency and paper. Profit that wanders between countries without contracts behind it is what triggers the audits you read about.

The build order

Done in the right sequence, the whole structure goes live in eight to twelve weeks: holding first (so the subsidiaries are born inside the structure — moving them in later costs real tax), then the operating entities in parallel, then banking, then the inter-company contracts before the first cross-border euro flows. And the boring part that makes it all durable: one coordinated monthly close across all three entities, so the consolidated numbers exist before anyone asks for them.