Should you have a HoldCo and OpCo?

Many founders wonder whether they should separate their business into a holding company (HoldCo) and an operating company (OpCo). This structure can offer significant benefits including asset protection, tax efficiency, and cleaner cap table management.

A HoldCo typically owns the intellectual property, investments, and equity in subsidiaries, while the OpCo handles day-to-day operations. This separation creates a liability firewall - if the OpCo faces legal issues, the assets in the HoldCo remain protected.

For Singapore startups seeking venture capital, this structure can also simplify future fundraising rounds and potential exits. However, it does add complexity and administrative overhead, so it's not right for every company.

Contact us to discuss whether a HoldCo/OpCo structure makes sense for your specific situation.