Holding Company Luxembourg
Create your holding company in Luxembourg. SOPARFI with participation exemption, SPF for family wealth. Optimal tax structuring.
In summary: Luxembourg offers two main holding structures: SOPARFI (commercial holding with participation exemption on dividends/capital gains) and SPF (family wealth company with tax exemption). Conditions: minimum 10% holding or €1.2M, 12-month holding period.
Luxembourg Holding Companies
Luxembourg is one of the world's leading jurisdictions for holding companies. The country offers attractive tax regimes and a stable legal framework that make it ideal for international structuring.
SOPARFI - Financial Holding Company
The SOPARFI (Société de Participations Financières) is the most widely used holding structure in Luxembourg. It is a commercial company that can hold participations and benefit from the participation exemption regime.
Key Features
- Can be formed as SARL or SA
- No specific authorization required
- Can conduct ancillary commercial activities
- Access to Luxembourg's double tax treaty network
- Full participation exemption on qualifying holdings
Participation Exemption Conditions
| Requirement | Details |
|---|---|
| Minimum holding | 10% or acquisition cost of €1.2 million |
| Holding period | 12 months (or commitment to hold) |
| Subsidiary taxation | Subject to comparable tax (at least 8.5%) |
| Exemption rate | 100% on dividends and capital gains |
SPF - Family Wealth Company
The SPF (Société de gestion de Patrimoine Familial) is reserved for private wealth management. It offers a simplified tax regime for families and individuals.
Eligible Investors
- Individuals managing private wealth
- Wealth management entities (trusts, foundations)
- Intermediaries acting on behalf of individuals
SPF Tax Regime
| Tax | Treatment |
|---|---|
| Corporate income tax | Exempt |
| Municipal business tax | Exempt |
| Net wealth tax | Exempt |
| Subscription tax | 0.25% of paid-up capital + share premium (min €100, max €125,000/year) |
| Withholding tax | 15% on dividends (subject to treaty relief) |
Comparison: SOPARFI vs SPF
| Feature | SOPARFI | SPF |
|---|---|---|
| Legal form | SA, SARL, SCA | SA, SARL, SCA, SCoSA |
| Eligible investors | Any investor | Individuals/family structures only |
| Tax treaties | Full access | No access |
| EU directives | Applicable | Not applicable |
| Activities | Holdings + commercial | Passive holdings only |
| Taxation | Normal regime + exemptions | Full exemption + subscription tax |
Luxembourg Advantages
- 103 double tax treaties: Extensive treaty network
- EU membership: Parent-Subsidiary and Interest & Royalties Directives
- No withholding tax: On interest and royalties paid abroad
- IP regime: 80% exemption on qualifying IP income
- No CFC rules: No controlled foreign company legislation
- Stability: Predictable legal and tax environment
Our Services
- Holding structure analysis and optimization
- SOPARFI or SPF incorporation
- Substance requirements compliance
- Tax planning and structuring
- Ongoing administration and compliance
- Exit and restructuring strategies
Frequently Asked Questions
A SOPARFI (Société de Participations Financières) is a Luxembourg holding company that benefits from the participation exemption regime. It allows 100% tax exemption on dividends received and capital gains from qualifying participations.
To benefit from the participation exemption: minimum holding of 10% or acquisition cost of €1.2 million, 12-month holding period, and the subsidiary must be a qualifying company subject to comparable taxation (at least 8.5%).
An SPF (Société de gestion de Patrimoine Familial) is a private wealth management company reserved for individuals and family structures. It benefits from a favorable tax regime with exemption from corporate income tax.
A SOPARFI is subject to the normal Luxembourg corporate tax regime (~23.87%). However, it benefits from the participation exemption on dividends and capital gains from qualifying participations, making the effective taxation very low.
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