Foreign investors interested in opening a business in Luxembourg can incorporate the company as a SOPARFI (Societe de Participations Financieres), which is a trading company liable to local taxation. Our experts can provide you with information on the main benefits of a SOPARFI in Luxembourg and can represent you in the registration process.
| Quick Facts | |
|---|---|
| What is a SOPARFI? | The SOPARFI (Société de Participations Financières) is a type of company that is created for financial and holding activities. It can also undertake commercial activities. |
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Who can register a SOPARFI? |
Local and foreign businessmen |
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Law applicable to the SOPARFI |
The Luxembourg Law on Commercial Companies |
| Legal entities accepted |
– public limited liability company (SA), – private limited liability company (SARL), – partnership limited by shares (SCA), – special limited partnership (SCSp), – cooperative, – European company (SE). |
| Minimum capital requirements |
The capital of SOPARFI in Luxembourg depends on the selected legal entity: for SARL, the capital requirement is min. EUR12,000, while for the SA – min. EUR30,000. |
| Institution handling the registration procedure |
Trade and Companies Register |
| Statutory documents of the SOPARFI |
Articles of Association |
| Types of business activities |
– holding, – financial activities, – commercial activities |
| Corporate taxes charged (yes/no) |
Yes |
| Shareholding and director requirements | A SOPARFI in Luxembourg can have minimum 1 shareholder, if it is registered as a SARL or SA, and 2 shareholders (1 general partner and 1 limited partner) for a SCA. |
| Withholding taxes |
15% withholding tax on dividends (reductions or exemptions are available) |
| Capital gains tax (yes/no) |
No (but the tax can be charged in some conditions) |
| Trading license required (yes/no) |
Yes, if the company carries out commercial operations. |
| VAT obligations in Luxembourg |
For holding and financial activities, no, but it can be charged when the SOPARFI develops commercial operations. |
| Advantages of the SOPARFI in Luxembourg |
– access to the double tax treaty network, – it qualifies for the tax advantages provided by the EU Parent-Subsidiary Directive, – it can be registered under different legal entities, – it can develop multiple types of business operations, – it can hold many types of assets (real estate, stocks, bonds, cash, currencies, etc.). |
How can your team assist me in starting a SOPARFI in Luxembourg?
Foreign investors can obtain a variety of dedicated services, tailored around the particular needs of each case. When we refer to the registration of a SOPARFI, our team will:
- present the requirements clients must abide by for the registration of the entity;
- ask for the client’s paperwork and prepare the application file;
- assist in selecting one of the legal entities that is most suitable for the business plans investors have;
- present the tax obligations and benefits available for this company type under the local law;
- complete the company registration procedure and get in touch with all the responsible institutions, etc.
What are the main characteristics of a SOPARFI in Luxembourg?
A SOPARFI is a financial holding company which is fully liable to taxation on income, such as the corporate income tax or value added tax. Under the Luxembourg legislation, a SOPARFI is allowed to carry on various commercial activities, as stated in the articles of associations of the company.
What types of activities can the SOPARFI engage in?
- It can own, acquire, dispose of the shares of other companies, which can be local or foreign;
- It can own gold, cash, foreign currencies, etc. and hold these assets in various financial institutions;
- It can own intellectual property, such as patents or licenses.
What are the legal forms of SOPARFI in Luxembourg?
Investors interested in opening a SOPARFI in Luxembourg should know that they can incorporate the company under one of the following legal forms:
- public limited company;
- private limited liability company;
- partnership limited by shares.
Do I need to abide by any capital requirements?
Yes. Investors have to prepare a minimum share capital that will be subscribed during the incorporation procedures. The capital will vary in accordance with the company type selected.
What are the capital requirements available in 2026?
- If you will incorporate a private limited company, you must prepare a minimum share capital of EUR 12,000;
- If you will opt for the public company or the partnership limited by shares, the minimum capital requirements will increase to EUR 30,000.
More details on the SOPARFI in Luxembourg are available in the video below:
Who can be the founder of a SOPARFI?
A SOPARFI in Luxembourg can be incorporated by a natural or legal person, regardless of the place where the person is tax resident.
What are the founding documents of a SOPARFI?
The SOPARFI’s statutory documents are the articles of association, which must be signed in front of a public notary in Luxembourg, that should further on be registered with the Trade and Companies Register.
Do I need to abide by any substance requirements in 2026?
Yes, the SOPARFI must also have a local registered address which will be used as a legal address and it must appoint a director or a board of directors to manage the company – the managing body will be chosen based on the share capital of the company. Apart from the requirements presented here, the investors must also appoint a Luxembourg domiciliation agent to complete the company registration procedure.
Do I need to obtain a license for a SOPARFI company?
If the company carries out commercial or industrial activities, it is compulsory to obtain a trading license from the Ministry of Small and Medium Sized Businesses, Tourism and Housing.
Is it necessary to open a corporate bank account in Luxembourg for a SOAPRFI in 2026?
Yes, if you want to set up a SOPARFI in Luxembourg, it is required to open a corporate bank account at any of the local commercial banks operating here. Our consultants can help you select a banking institution and can also represent you in the formalities established by the bank.
The infographic below presents how to set up a SOPARFI in Luxembourg:
What tax exemptions can the SOPARFI obtain in 2026?
Although the SOPARFI is taxed as a company, it can be exempted from paying various taxes, as reflected below:
- exemption on the payment of the withholding tax on dividends can be granted if the beneficiary owns 10% of the company’s capital for minimum 12 months;
- in a SOPARFI, the capital gains are not taxable and this regulation takes into consideration all types of related operations;
- the company’s profits may be exempted from the corporate tax, if specific conditions are met.
Can the SOPARFI benefit from the provisions of local double taxation treaties?
Yes, investors who want to set up a SOPARFI must know that this type of entity is entitled to benefit from the provisions of the double tax treaties that are currently in force in Luxembourg.
Why open a SOPARFI holding in Luxembourg?
There are plenty of reasons for which a businessman can make an investment in Luxembourg through a SOPARFI. Apart from the tax benefits a Luxembourg SOPARFI company offers, foreign investors also take into account the aspects presented below:
- privacy – the holding company offers enhanced protection to both the shareholders and the directors of the company;
- easy registration procedure – Luxembourg is one of the most advanced countries in Europe when it comes to the easiness of incorporating a business;
- minimum company registration requirements – only one shareholder and one director suffice to open a SOPARFI company;
- the SOPARFI company is ideal for issuing financial instruments, for listing shares on the Stock Exchange or for raising capital by investment.
What is the main rule of law applicable to a SOPARFI?
The legislation applicable to a SOPARFI is the Law on Commercial Companies.
If you need further information on the SOPARFI in Luxembourg, please contact our financial specialists, who can provide you with assistance for the incorporation of a company according to your business interests.