The Equity Holding Company as an instrument of corporate reorganization Business groups can be reorganized through holding companies with

significant pr operty tax benefits Factual situation • • There are many entrepreneurs who started their career with one company, probably familial, and that eventually, after hard efforts, have m anaged to accumulate an estate consisting of several companies, some real estate and financial assets. This structure of companies, all dependent on individuals , is typically inefficient from the standpoint of organizational and fiscal. Wha t are holding companies? Business assets can be organized efficiently through ho lding companies. • have a flexible structure that allows future business expansi ons and new investments, the centralization and coordination of group activities , the possible provision of management support to subsidiaries. • Financial type channeling financial resources to the holding to be invested in the activities of the subsidiaries or the creation of new businesses, the possible reduction in funding costs of the group, the optimization of cash, both in enterprises and i ndividuals, the increase in the solvency of the group, and the disaffection of t he profits distributed to the holding of the subsidiary's operational risk. • Ta x type distribution of profits to the holding without withholding tax and enjoyi ng the relief from double taxation of dividends, to facilitate the achievement o f tax exemption for the Heritage of the shares for the case of a future inherita nce or donation shares qualify for the rebate of 95% in the taxable amount of in heritance tax and gift tax credit for reinvestment of company tax by the possibl e capital gains arising on the sale by the Holding of shares in subsidiaries and their subsequent reinvestment, the ability to implement fiscal consolidation in the Tax • • • • What are the advantages of holding companies? Holding companies are those whose assets consists of shares in other companies. The main advantages are threefold: organizational, financial and fiscal. Organizational type a holding company to: • • • • Company and VAT if the holding company owns at least 75 or 50% from equity. Are Holding Companies primarily engaged in the mere management of heritage furniture ? Recall that the asset management companies simply do not enjoy tax exemption f or the Heritage or the rebate of 95% in the Inheritance Tax Well, holding compan ies have these benefits if: • direct and manage the shares, having to do so with adequate material and human resources; • • shares to a holding company, give at least 5% of voting rights, the subsidiaries are not mere management companies What are the fiscal costs of the reorganizati on? Obviously, the tax cost depends on each specific situation, but if we welcome th e special regime for mergers, transfers of assets and exchanges of securities of the Corporation Tax Law, we can do at zero cost, as regards said tax. There wou ld, however, consider other taxes, including income tax and municipal tax capita l gains. Efficient use of holding companies in business groups Family Group

reinvestment of dividends tax relief dividends without deduction Holding company Property company Company trades l Industrial company Other Businesses CapitalRiesgo Society Advantages of holding: - No mere management - Dividends exempt - Gains from sale after deduction for reinvestment investees - Strengthening Corporate tax and VA T I - Possible exemption I. Heritage / possible bonus 95% Inheritance Tax - Dedu ction for support services to management - Providing portfolio depreciation (pre -consolidation)