Imagine a family with income real estate, an operating company (with labor and tax risks) and heirs who do not talk to each other when it comes to money. The patriarch gets sick, there is no governance, and the question appears too late: “will there be inventory, who signs the rents, how does he pay taxes, and who manages all this?”. It is in this type of scenario, and not in the “everyone needs it”, that the asset holding company usually enters as a tool for organization, succession and management.

But it is not a free pass for “shielding” or a universal formula. Depending on the assets, family dynamics, income profile, and business risk, it can be an excellent mechanism. However, in other cases, it can be a bureaucratic cost with marginal benefit.

What is, in practice, the Holding Company:

An equity holding company is a legal entity created to concentrate assets and rights (very common with real estate, equity interests, and investments) and organize administration, succession, and governance rules through the contract/bylaws. The logic of “participating in other companies” is admitted by the Brazilian Corporation Law (Law 6.404/76), which opened space for the arrangement of holding companies in Brazil.

When it usually makes sense:

The equity holding company usually makes sense when there is a relevant and dispersed equity, especially composed of real estate, participations and assets that require constant management. In these cases, the family usually seeks something very concrete: to centralize management (rentals, renovations, sale and reinvestment), standardize decisions (who approves what, what are the quorums, how the entry and exit of partners work) and prevent each asset from becoming an “island” with its own rules, mismatched documents and improvised decisions. The structure, when well designed, works as a single command center for the heritage, with routines, responsible and previous rules.

It also tends to be useful when the focus is on succession planning. The priority here is to reduce friction in the generational transition. The holding company allows you to define administrators and responsibilities, clearly separate ownership (quotas) from management (administration), create barriers to the sale of quotas to third parties and organize how results, reinvestments and costs will be distributed. The main gain is to reduce the risk of patrimonial paralysis in the post-mortem period, a common situation when everything is stuck between probate, family dispute and difficulty in making decisions.

In addition, tax timing has entered the radar more strongly. With EC 132/2023, which regulates the Tax Reform, the debate on possible changes in the taxation of the ITCMD gained strength, and this reheated the debate on living donations and succession planning in several states. This does not mean “holding in a hurry”, but it does mean recognizing that the cost of not planning can rise and that estate decisions made late are usually more expensive and more litigious, especially when the family is already under emotional or legal pressure.

When it usually does NOT make sense:

The constitution of an equity holding company requires caution, as the adoption of this structure must always consider the particularities of each family and its assets.

Depending on the size of the family assets, the costs involved, such as accounting, accessory obligations, registrations, and maintenance of the legal entity, may end up outweighing the practical benefits of the structure. For this reason, the performance of specialized professionals is essential to assess the feasibility of the structure and define the most appropriate model for the needs of the specific case.

Attention is also needed when the main objective is to “shield” assets against creditors. The transfer of assets to a holding company with the intention of escaping judicial executions, hiding assets or simulating operations can generate nullities, liability of the partners and even the disregard of the legal personality.

Another sensitive point involves structures based exclusively on the expectation of reducing taxation. It is important to note that a holding company is not synonymous with automatic tax savings. Although there may be tax advantages, they vary according to the tax regime, the nature of the revenues, and the applicable legislation. In some cases, the costs of the structure can even neutralize the eventual benefits.

How to avoid the most common distortions:

To avoid the most common distortions in the constitution of equity holdings, it is essential to understand that this structure must be used with a legitimate purpose and consistent planning. In practice, three deviations are the ones that most often compromise the validity and safety of these structures.

The first is asset concealment or fraud against creditors. When the logic of the structure is simply to transfer assets so that “no one can reach them”, the planning itself tends to become evidence against the owner of the patrimony. In these cases, the holding company can be disregarded in court and the assets affected.

The second deviation occurs when there is tax fraud disguised as tax planning. Legitimate planning presupposes economic substance, business purpose and adequate documentation. Simulated structures, companies created only for appearance, or financial transactions without real backing are usually identified over time, generating relevant tax risks.

The third point involves the injury to the reserved portion and succession conflicts. The creation of a holding company does not authorize ignoring the rules of succession law or removing the rights of necessary heirs.

In summary, the best way to avoid these problems is relatively simple in theory, although it requires care in practice: legitimate purpose, clear governance, regular accounting, and well-structured documentation. These elements are essential to ensure that the holding company fulfills its function of asset organization without generating future legal risks.

Conclusion

The equity holding company makes sense when it is understood for what it really represents: an instrument of organization, governance and estate planning, which can produce succession and eventually tax effects, but which should not be treated as an automatic solution or a “magic shield”.

In a scenario of constant changes in the tax and succession environment, estate planning increasingly requires technical analysis and long-term strategy.

In this context, the adoption of an equity holding company must start from some fundamental reflections: what concrete problem is intended to be solved, whether of management, succession, risk or governance, whether the structure is legally supported without depending exclusively on a specific tax thesis and, also, whether the entire asset organization has coherence, transparency and sufficient documentation to withstand any analysis of heirs, creditors or the tax authorities themselves.

When these answers are clear and consistent, the holding company tends to prove to be an efficient tool for wealth planning and organization. Otherwise, there is a risk of transforming a strategy that should generate security into a costly and legally vulnerable structure.

Legal and Bibliographic References

MAMEDE, Gladston. MAMEDE, Eduarda C. Asset Shielding and Legal Planning, 5th edition. São Paulo: Grupo GEN, 2015. E-book. ISBN 9788522496297. Available at: https://app.minhabiblioteca.com.br/#/books/9788522496297/. Accessed on: 10 out. 2024.

MAMEDE, Gladston. MAMEDE, Eduarda C. Family Holding and Its Advantages: Legal and Economic Planning of Assets and Family Succession. 10. ed. São Paulo: Atlas, 2018.

DINIZ, Maria Helena. Holding: a viable solution for the protection of family assets. Revista Argumentum, Marília/SP, V. 20, n. 1, p. 17-34. 2019. Available at: http://ojs.unimar.br/index.php/revistaargumentum/article/view/1111. Accessed on: 10 out. 2024.

COELHO, Fábio. Commercial Law Course: Companies. São Paulo (SP):Editora Revista dos Tribunais. Chapter 17: Disregard of the Legal Personality. 2022. Available at: https://www.jusbrasil.com.br/doutrina/curso-de-direito-comercial-sociedades/1440739915. Accessed on: 10 out. 2024.

BRAZIL. Law No. 10,406, of January 10, 2002. Establishes the Civil Code. Brasília, DF: Presidency of the Republic, 2002. Available at: https://www.planalto.gov.br/ccivil_03/leis/2002/l10406compilada.htm Accessed on: 10 out. 2024.

Bruna Maatalani Benini.

Graduated in law from Mackenzie Presbyterian University (2024). Member of the Brazilian Bar Association, São Paulo Section (OAB/SP) (2025). Postgraduate student in Business Law at Fundação Getúlio Vargas (FGV). Author of Articles. Effective Member of the Business Advocacy Commission of the 33rd Subsection of the OAB. Lawyer in the Advisory Department at TM Associados.

Camila dos Santos

Graduated in Law from Centro Universitário Padre Anchieta (2024). Member of the Brazilian Bar Association, São Paulo Section (OAB/SP) (2025). Author of Articles. Lawyer in the Advisory Department at TM Associados.