A holding company is a company whose main purpose is to hold shares in other companies rather than to carry on an operating activity of its own. It sits at the top of a group structure, controls the subsidiaries through its shareholdings, and is the entity that normally produces the consolidated accounts.
Two forms exist, and French tax law treats them very differently. A passive holding limits itself to managing its portfolio: it receives dividends and exercises its shareholder rights, nothing more. An active holding, known in France as a holding animatrice, participates actively in the group's policy and renders genuine services to its subsidiaries, typically management, finance, legal or IT.
The distinction is not cosmetic: it conditions several significant tax regimes. Active holding status is required to claim certain reliefs on business assets, and it is a condition frequently examined during audits. The evidence expected is factual rather than statutory: service agreements, board minutes, invoices for services actually rendered, and proof that the subsidiaries received something. A holding that describes itself as active on paper but produces no such evidence is the classic reassessment case.
That evidentiary requirement is the same one that governs management fees: the recharge must correspond to a real service, distinct from the oversight a shareholder exercises over its own investment. The two questions are examined together in practice.
A holding also concentrates flows: it invoices the subsidiaries, receives dividends, and often centralises payments and cash. Each of those creates an intercompany transaction that must mirror on both sides. See holding company invoice routing for the operational handling of incoming invoices at group level.
