DEFINITION
Domiciliary Company
In Switzerland, a domiciliary company is defined as all legal entities, companies, establishments, foundations, trusts, fiduciary companies or similar associations that are non-operating. A non-operating company typically won’t have its own business premises nor its own employees. In more general terms, a domiciliary company can also be seen as a legal entity incorporated in one jurisdiction that doesn’t conduct significant business activities or maintain substantial physical operations in that jurisdiction.
Synonyms
Non-operational entity, holding company
Acronyms
DC
Share
Synonyms
Non-operational entity, holding company
Acronyms
DC
Examples
A company has a registered address in the British Virgin islands where it benefits from low tax rates and simplified regulatory requirements. However, its operating address, i.e. where it primarily operates, is set in Switzerland. In this case, the headquarters in the British Virgin Islands would be classified as a domiciliary company.
FAQ
Are domiciliary companies illegal?
No. While domiciliary companies are often subject to Enhanced Due Diligence due to a heightened risk of money laundering or tax evasion, they can operate fully within the law.
Why are domiciliary companies used?
Domiciliary companies are commonly used to manage assets, benefit from tax regimes, and simplify cross-border transactions.
How do banks process domiciliary companies?
When conducting business with domiciliary companies, banks perform Enhanced Due Diligence to more accurately assess any potential risks of financial crime.
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