Resources

The big restructuring question: US entity as holding company or subsidiary?

Published on

November 28, 2024

The answer

It depends on why you're incorporating in the US in the first place. Restructuring decisions vary from case-to-case basis.

Broadly, the two common types of structuring are:

  1. Home country entity as holding company and US entity as subsidiary
  2. US entity as holding company and home country entity as subsidiary

US entity as subsidiary

Register your US entity as subsidiary if:

  1. You have very strong presence and established operations in home country
  2. Most investors and employees are outside the US
  3. Purpose of having US entity is primarily for clients and business only

US entity as holding company

Consider restructuring and make your US entity the holding company if:

  1. You plan to fundraise in the US, as most investors prefer this structure
  2. Your operations and investors are spread across different countries, not just in your home country
  3. You seek global reach, visibility, and potentially higher valuations
  4. You're considering an exit as an option in the future

Resources