Investors, founders and co-investors often ask whether they need an SPV or a HoldCo, as if the two were rivals. They are not. They do different jobs, and many setups use both.
This guide explains what each structure is for, how Germany and Ireland tax the two layers, and the questions that decide which one fits. For the wider picture on company types in Germany, see our guide to incorporating a GmbH, UG or Ltd.
What an SPV is for
An SPV (special purpose vehicle) is a separate company created for one purpose, usually one deal or one asset. Typical uses are buying a property, holding a stake in a start-up, or bringing co-investors into a single transaction.
What it gives you:
•Ring-fenced risk. The deal sits in its own entity, away from your other assets.
•Clean co-investing. Partners hold shares in one place, on agreed terms.
•Separate books and bank account for that deal.
•A defined exit. You sell the asset, or you sell the shares in the SPV.
“SPV” describes a company’s purpose, not a legal form. In Germany the vehicle is usually a GmbH or UG, and a GmbH & Co. KG is sometimes used for property or family structures. In Ireland it is usually a private company limited by shares (LTD) or a limited partnership. A DAC is used where listed debt or structured finance is involved.
What a HoldCo is for
A HoldCo (holding company) owns shares in other companies over the long term. It does not usually trade itself. It sits above operating companies or SPVs and collects what comes up: dividends and sale proceeds.
What it gives you:
•One place to keep and reinvest profits and exit proceeds.
•A single owner at the top of several companies.
•Flexibility on timing. You decide when money moves out to you personally.
•A cleaner route for succession or for bringing family members in.
They are usually layers, not rivals
The common picture looks like this:
You
└ HoldCo
├ SPV: Deal A
├ SPV: Deal B
└ OpCo (your operating company)Each deal’s risk stays inside its own SPV, while the proceeds flow up to one place. A HoldCo without SPVs is common for founders. An SPV without a HoldCo is common for a one-off deal with partners.
Side by side
Main job
Isolates one deal or asset
Owns and coordinates shareholdings over time
Lifespan
Fixed, ends at exit
Long term, no fixed end
Typically owns
One asset or investment
Shares in several companies or SPVs
Typically owned by
Often several co-investors
You, your family or a small group
Liability
Ring-fenced to that deal
Depends on any guarantees given
Tax angle
Clean entry and exit
Retained profits and exits flowing upward
Admin
Light per entity, adds up with many
One set of accounts, adds a layer
How Germany taxes the two layers
A GmbH pays corporation tax of 15%, plus a 5.5% solidarity surcharge on that amount (15.825% in total), plus municipal trade tax. Together that lands at roughly 30% on retained profit. A law passed in July 2025 lowers corporation tax by one point a year from 2028, reaching 10% in 2032.
The holding relief sits in § 8b KStG. When a company receives dividends from another corporation, or sells shares in one, 95% is exempt. The remaining 5% counts as a non-deductible expense, which puts the effective rate at around 1.5% when the conditions are met.
Two conditions matter most:
•Dividends: at least 10% held at the start of the calendar year. Trade tax relief on dividends needs 15%.
•Gains on sale: no minimum percentage.
The relief applies to shares, not property. Rental income inside a company is taxed as ordinary corporate income.
Illustrative example: a HoldCo sells a stake at a €1,000,000 gain. 95% is exempt, and the other 5% (€50,000) is taxed at roughly 30%, around €15,000 or 1.5% of the gain. A private shareholder selling a substantial stake (1% or more) could face up to roughly 28.5% at the top rate. This is not a saving on its own, because paying the proceeds out to you personally is taxed again. The real benefit is timing and flexibility to reinvest.
How Ireland taxes the two layers
Irish companies pay 12.5% on trading profits and 25% on passive income. Capital gains in a company are generally taxed at 33%.
Two reliefs make an Irish HoldCo work:
•Section 626B: gains on selling a holding of at least 5% are exempt if the shares were held for 12 months and the subsidiary is a qualifying (broadly, trading) company resident in the EU, EEA or a treaty country.
•Participation exemption (from 1 January 2025): qualifying foreign dividends are exempt under the same 5% and 12-month tests.
Dividends between Irish companies are generally exempt too.
As in Germany, the asset matters. Rental and other passive income is taxed at 25%.
Taking money out personally
In both countries, money inside a HoldCo has not yet reached you. Paying it out is a separate taxable event at your personal level. In Germany, dividends paid to a private individual are generally taxed at 26.375%. In Ireland, the result depends on your own tax position.
So a HoldCo mainly defers tax and gives you control over timing. It does not remove the personal layer.
Which one fits? The questions that decide it
•One deal or several over time?
•Are co-investors involved?
•What does the structure hold? Shares in companies, or property?
•How long will you hold, and what is the exit?
•Do you need the money personally soon, or will you reinvest it?
•Where do you live, and where might you move?
As a rough guide:
•One deal with partners usually points to an SPV.
•Retained profits you want to reinvest usually point to a HoldCo.
•Several deals over time usually point to a HoldCo with an SPV per deal.
Three illustrative scenarios
Two investors, one deal. They each put in €200,000 to buy one asset. An SPV keeps the deal separate and gives both a clear share. A HoldCo would add cost with no benefit.
A founder with an operating GmbH. Profits build up and the founder wants to reinvest rather than draw everything personally. A HoldCo above the GmbH gives one place to hold and redeploy that capital.
An investor doing several deals a year with partners. A HoldCo owns the stakes, and a fresh SPV is created for each deal. Risk stays inside each deal while proceeds return to one place.
Common mistakes
•Adding a HoldCo with no plan to reinvest. An extra layer costs money in accounts and filings.
•Using an SPV for something meant to last decades. You end up restructuring later.
•Missing a shareholding threshold. In Germany, 10% and 15% decide whether the dividend relief applies. In Ireland, it is 5% for 12 months.
•Treating the company as a personal wallet. In Germany, benefits paid to a shareholder without a clear agreement made in advance, such as private use of company assets or an informal loan, can be treated as hidden profit distributions.
•Forgetting about residency. Holding shares through a company does not automatically remove Germany’s exit tax question. Your shares in a HoldCo can themselves be a qualifying holding, and indirect holdings count towards the 1% threshold. See our Germany exit tax checklist and our guide to Irish exit tax.
Where the details matter
The ownership order, the jurisdiction of each layer, the shareholding thresholds, and the agreements between co-investors decide whether a structure works as intended. This is where the details matter. We handle the setup so you don’t have to.
Frequently asked questions
Do I need both an SPV and a HoldCo? No. Many people need only one. A single deal with partners often needs just an SPV. A founder reinvesting profits often needs just a HoldCo.
Can one company do both jobs? Legally yes, but mixing a long-term holding with a one-off deal makes exits, co-investor terms and liability harder to manage.
Is a HoldCo tax-free in Germany? No. Under § 8b KStG, 95% of qualifying dividends and gains is exempt and 5% is taxed, which gives an effective rate of around 1.5% when the conditions are met. Paying money out to you personally is taxed separately.
Does Ireland work the same way? The logic is similar. Section 626B exempts gains on qualifying holdings of 5% or more, and a participation exemption has covered qualifying foreign dividends since 1 January 2025. The conditions and the rates differ from Germany.
Does Richmond Blackwood advise on which investments to make? No. We create and administer the structures and handle accounting, payments and governance. We do not provide investment advice or regulated financial services.
The bottom line
SPV and HoldCo are tools for different jobs. An SPV isolates a deal. A HoldCo holds and reinvests over time. Most real setups combine them, and the right combination depends on your deals, your co-investors, the assets involved and where you live.
If you are planning a deal or rethinking how your holdings are structured, Richmond Blackwood sets up SPVs and HoldCos and handles the accounting, payments and governance. We analyse your setup and propose a structure at no cost to you, and you decide whether it makes sense. Talk to an expert.
Disclaimer
This article is for general informational purposes only and does not constitute tax, legal, or financial advice. Tax outcomes depend on your facts, residency position, entity types, and the jurisdictions involved. Always take advice from qualified professionals before restructuring, signing transaction documents, or completing a disposal.
