An IP holding structure decides which company in a group is the legal owner of the trade marks, patents, designs, software and domain names that the rest of the group uses. There are three workable models (each subsidiary owns its local rights, the parent owns everything, or a dedicated IP company owns and licenses), and the right choice depends on where the group sells, manufactures, licenses and enforces, not only on tax. This guide is for founders, finance directors and in-house counsel of groups operating across Europe, Latin America and Africa.
Key takeaways
- Ownership has to be visible on every register: under EU law, the buyer of an EU trade mark cannot invoke it until the transfer is recorded.
- A company that will hold Madrid international registrations must itself be entitled to use the Madrid System, through nationality, domicile or a real establishment in a member.
- Use by a group company counts as use by the owner for EU and Spanish marks, but only if consent can be proved, which in practice means a written licence.
- The register and the tax analysis are different questions: under the OECD Transfer Pricing Guidelines, legal ownership alone does not entitle a company to keep the returns from an intangible.
- Centralising IP is a project, not a signature: chain of title, recordals, licences and enforcement standing have to be fixed office by office.
What is an IP holding structure and why does it matter?
Most groups never choose an ownership model; they inherit one. The founder files the first trade mark in their own name, a Mexican subsidiary files locally, an agency registers the domain names and a developer who was never an employee writes the core software. The result is a portfolio owned by five or six different people and companies, often without the licences that would explain why the others are using it.
That matters when you need to stop an infringer, when a licensee or buyer checks the chain of title, and when you raise finance or sell the group. This article deals with the IP-law side. Tax, transfer pricing and the jurisdiction of an IP company must be reviewed by your tax advisers; both analyses run together, but they are not the same.
Three models for owning a group’s IP
| Model | How it works | Usually fits when | Main risks |
|---|---|---|---|
| Local ownership | Each subsidiary owns the rights in its own country | Brands and products differ by market, or local businesses may be sold separately | Inconsistent portfolios, gaps between countries, rights that leave with a subsidiary |
| Parent ownership | The operating parent owns every right and lets subsidiaries use them | One brand, one product range, a parent with real IP management | Use by subsidiaries without written licences; parent’s financing and insolvency exposure |
| Dedicated IP company | A group company owns the rights and licenses them to the operating companies | Many markets, third-party licensing, financing secured on IP or a planned sale | Lack of people managing the IP, unrecorded licences, eligibility for Madrid |
| Regional hubs | For example, EU rights in the European parent and Latin American rights in a regional company | Regional management teams with their own budgets | The same mark owned by different companies in neighbouring markets |
In practice, the most frequent answer is one owner per right type (trade marks and designs in one company, patents where the R&D team sits), with written licences running to every company that uses them.
What the registers require before an IP holding structure works
A group assignment agreement changes ownership between the parties, but third parties look at the register. Under Regulation (EU) 2017/1001 on the EU trade mark, a transfer must be made in writing and signed by both parties, unless it results from a judgment (Article 20(3)); so long as it has not been entered in the register, the transferee may not invoke the rights arising from the registration (Article 20(11)); and transfers and licences have effect against third parties in all Member States only once entered (Article 27(1)).
National rules follow the same logic. In Spain, the Trade Marks Act 17/2001 makes assignments and licences enforceable against third parties in good faith only once registered (Article 46(3)), and the Patents Act 24/2015 requires assignments and licences to be in writing to be valid (Article 82(2)) and registered to take effect against third parties in good faith (Article 79(2)).
The Madrid System adds a condition that is easy to miss. Under Article 9 of the Madrid Protocol, WIPO records a change of ownership only if the new holder is entitled to file international applications under Article 2(1): it must be a national of, be domiciled in, or have a real and effective industrial or commercial establishment in a Madrid member. An IP company incorporated outside the system cannot take over the international registration, and for the first five years the international registration still depends on the basic mark (Article 6(3)).
Chain of title: does the group really own what it created?
Centralising rights the group does not own simply moves the problem. Before any transfer, check how each asset came into the group.
- Employee inventions: in Spain, inventions made by employees as a result of research that is the object of their contract belong to the employer (Patents Act, Article 15). Other countries in the corridor have their own rules, and inventors who are consultants or university staff need written assignments.
- Software: Article 97(4) of the Spanish Intellectual Property Act gives the employer the exploitation rights in programs created by salaried employees in their duties, unless otherwise agreed. Freelance developers are not employees: without a written assignment, the code may still be theirs.
- Logos, packaging and websites created by agencies: do not assume that paying the invoice transfers the rights; read the contract.
- Domain names: often registered in the name of an employee or agency; move them to the chosen owner.
Use, licences and enforcement inside the group
Once ownership is centralised, the operating companies become licensees. Two consequences follow. First, use of an EU trade mark with the consent of the proprietor is deemed to be use by the proprietor (EU Regulation, Article 18(2)), and Spanish law says the same (Trade Marks Act, Article 39(4)). If a non-use attack arrives, a written licence is the simplest proof of that consent.
Second, the licensee usually cannot sue on its own. Under Article 25(3) of the EU Regulation, a licensee needs the proprietor’s consent to bring infringement proceedings, although an exclusive licensee may do so if the proprietor, after formal notice, does not act; in Spain, Article 48(7) of the Trade Marks Act follows the same approach, and licensees may not sublicense unless agreed (Article 48(3)). The licences should say who monitors infringements, who sues and who pays.
Finally, the tax side. The OECD Transfer Pricing Guidelines (January 2022) state that legal ownership of an intangible, by itself, does not confer a right to retain the returns from exploiting it (paragraph 6.42); group members that perform the development, enhancement, maintenance, protection and exploitation functions must be compensated (paragraph 6.32). An IP company with no one managing the portfolio is therefore a point to discuss with your tax advisers before you sign anything.
What this means for your business
- Build an inventory by owner of record in every register: EUIPO, OEPM, WIPO and each national office in Latin America and Africa.
- Decide the model per type of right and per region, together with your tax advisers.
- Close chain-of-title gaps with employee, contractor and agency assignments.
- Draft intra-group licences that cover territory, quality control, sublicensing and enforcement.
- Sequence the recordals: one request to WIPO covers the designations of an international registration; national and regional rights need a filing at each office.
- Move renewals, watch services and domain names to the new owner so nothing lapses in the transition.
If you need this coordinated across several offices, our cross-border IP strategy and portfolio structuring team can map the current ownership and design the transfer plan.
Where groups get IP ownership wrong
- Signing a group assignment and never recording it. The EU owner cannot invoke the mark until the transfer is entered, and in Spain the transfer cannot be relied on against third parties in good faith.
- Choosing an IP company that cannot hold the group’s Madrid registrations, which forces a costly switch to national filings.
- Relying on “everyone knows the subsidiary uses the brand” instead of written licences, and discovering the gap during a non-use action or an infringement claim.
- Leaving rights in the names of founders, distributors or agencies; recovering them later depends on their cooperation.
- Designing the structure for tax alone, with no one in the IP company actually managing the IP.
A single team that sees the whole portfolio can sequence transfers and licences so that enforcement standing is never lost.
Frequently asked questions
Does an IP holding company reduce the group’s tax bill?
That is a tax question and depends on each country’s rules, so it must be assessed by tax advisers. What we can say from the IP side is that, under the OECD Transfer Pricing Guidelines, legal ownership alone does not entitle a company to keep the returns from an intangible. The structure has to reflect who actually develops, protects and manages the IP.
Do intra-group trade mark licences have to be recorded?
Not always to be valid between the parties, but recording changes their effect against third parties. Under the EU trade mark Regulation, licences take effect against third parties in all Member States once entered in the register, and in Spain they are enforceable against third parties in good faith only once registered. We recommend recording where enforcement or a sale is foreseeable.
Can a Madrid international registration be transferred to any group company?
No. WIPO only records a change of ownership if the new holder is a national of, is domiciled in, or has a real and effective industrial or commercial establishment in a member of the Madrid System. Check this before choosing the jurisdiction of an IP company, together with the five-year dependency of the international registration on its basic mark.
Can IP Global Guard restructure our group’s IP ownership?
Yes. We audit ownership across registers, fix chain-of-title gaps, draft assignments and intra-group licences, and prepare and coordinate the recordals before the EUIPO, the OEPM and WIPO, directly where our professionals are entitled and otherwise through qualified representatives, with local correspondents in other offices. We work alongside your tax advisers.
How IP Global Guard can help you centralise ownership
An IP holding structure only works if the registers, the contracts and the people managing the portfolio tell the same story. IP Global Guard, the IP services line of META Channel Corporation Limited, handles portfolio audits, assignments, licences and recordals with one strategy and one billing relationship across more than 25 jurisdictions; see our coverage in Europe, Latin America and Africa. Where software, data or AI assets are involved, the same group also covers AI Act and GDPR compliance.
Send us your group chart, the list of countries where you file and sell, and an export of your current portfolio. We will show you who owns what today, which model fits and the order in which to move the rights. Contact our IP strategy team.
This article is general information, not legal advice or tax advice, and does not replace an assessment of your group’s specific situation.
Sources
- WIPO Lex, Regulation (EU) 2017/1001 on the European Union trade mark (14 June 2017)
- WIPO Lex, Madrid Protocol (as amended on 12 November 2007)
- BOE, Ley 17/2001 de Marcas (consolidated text, last updated 28 July 2022)
- BOE, Ley 24/2015 de Patentes (consolidated text, last updated 4 July 2018)
- BOE, Real Decreto Legislativo 1/1996, Intellectual Property Act (consolidated text, last updated 30 March 2022)
- OECD, Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (January 2022)
