Our financial experts, specialized in wealth management in Luxembourg, provide a wide range of services for international clients handling complex businesses and large amounts of money.
| Quick Facts | |
|---|---|
| Types of wealth management services |
– the administration of wealth of individuals, – legal representation in registering trusts, – assistance in registering foundations, – assisting foreign investors in the procedure of re-domiciliation, – the administration of various assets, such as real estate, etc. |
|
Legal entities for wealth management in Luxembourg |
– SPF (wealth management company, which can be incorporated as a public limited company, private limited company, partnership limited by shares, cooperative), – SOPARFI (financial holding company) |
|
Minimum capital required |
Between EUR 12,000 and EUR 30,000 (based on the selected business form) |
| Tax advantages for wealth management in Luxembourg |
– numerous tax exemptions for both the SPF and the SOPARFI, – low annual subscription tax, which is capped at EUR 125,000 for the SPF, – the SOPARFI benefits from the provisions of double tax treaties |
| Tax exemptions available in Luxembourg |
– for SPF: exemption on the corporate tax, the municipal business tax, net wealth tax, the withholding tax charged on dividends paid; – for SOPARFI: VAT exemption, income tax exemption applied on dividends received and on dividends paid in specific conditions, capital gains exemptions |
| Types of founders who can register the wealth management structures |
– individuals and corporate entities, – private wealth management entities, – other intermediaries representing the interests of their clients, – institutional organizations, – trusts, – investment funds, etc. |
| The main legal entity used for the administration of wealth of individuals |
SPF |
| The main types of assets managed by wealth management structures |
– bonds, – shares, – cash, – savings, – equities, – a wide range of other financial instruments, – real estate (the latter is applied only to the SOPARFI) |
| Law applicable to wealth management legal entities |
– for SPF: the SPF Law; – for SOPARFI: the EU Parent-Subsidiary Directive, Law of 10 August 1915 |
| Authorization required for the registration of wealth management entities (yes/no) | No (It can be necessary for the SOPARFI, depending on the activities it will carry out) |
| Taxes charged to wealth management entities |
– for SPF: the annual subscription tax; – for SOPARFI: a tax of 24.94% (it includes the corporate income tax, the municipal business tax, the solidarity surcharge), the wealth tax charged at a rate of 0.5% |
| Incorporating trusts/foundations available in Luxembourg (yes/no) |
Yes |
| Reasons to select Luxembourg for wealth management |
– a tax transparent cross-border system, – a clear legal framework for wealth management, – diversified system for wealth management, – tailored solutions for various types of high-net worth individuals/companies |
| Holding company available for wealth management activity (yes/no) |
Yes (SOPARFI is a type of holding company) |
| Immigration assistance available (yes/no) | Yes |
What are the main types of wealth management services in Luxembourg?
Our team of financial consultants can provide in-depth advice on the types of wealth management services that can be provided to natural persons and some of the most common are the following:
- asset management;
- investment advice;
- tax planning;
- estate planning.
Our services may also include relocation support that comprises residence permits and housing.
What are wealth planning structures in Luxembourg?
If you are interested in wealth planning, Luxembourg offers you two main types of structures that can help manage and protect your assets:
- SOPARFI (société de participations financières), which is a holding company used to manage investments;
- and the aforementioned SPF (Société de gestion de patrimoine familial).
What is an SPF in Luxembourg?
The family wealth management company (Société de gestion de patrimoine familial – SPF) is a legal structure created for private wealth management.
The SPF is regulated by the Luxembourg Law of 11 May 2007. It is used only for holding and managing private assets and is generally employed as a passive holding vehicle for long-term wealth administration. The SPF cannot carry out commercial activities or provide services to third parties.
The SPF can hold shares, bonds, cash, and financial instruments and is commonly used as a passive vehicle for preserving and administering private wealth over the long term. Investors interested in asset protection and financial administration commonly use this structure.
Who can open an SPF in Luxembourg?
Private individuals, private patrimonial entities, trusts, and foundations acting in private interest can open an SPF.
The investors do not need to be members of the same family. The SPF structure is aimed at private wealth activities and cannot be used for commercial trading or the provision of regulated financial services. Investors generally use this structure for the administration of personal assets and investment portfolios
The following video offers a short presentation on wealth management in Luxembourg:
What legal forms are available for an SPF?
An SPF can be incorporated as a private limited liability company (Société à responsabilité limitée – Sàrl) or as a public limited company (Société anonyme – SA).
The minimum share capital depends on the selected legal form:
- Sàrl – EUR 12,500;
- SA – EUR 31,000.
The SPF does not require direct authorization from the Commission de Surveillance du Secteur Financier (CSSF).
What is the tax regime of an SPF in Luxembourg?
The SPF is exempt from corporate income tax, municipal business tax, and net wealth tax. The SPF is subject to a subscription tax of 0.25%. It is also not required to register for value-added tax (VAT).
Tax obligations and reporting requirements can vary depending on the activities performed by the entity. Investors should also verify if additional tax obligations are mandatory in the jurisdictions where the shareholders are tax residents. The applicable reporting obligations may also vary depending on the country where the asset administration is performed or where the income is generated.
What is a SOPARFI in Luxembourg?
The financial holding company (Société de participations financières – SOPARFI) is a structure used for holding and managing investments. Compared to the SPF structure, the SOPARFI may be used for broader investment and holding activities and may participate in commercial operations depending on the selected business model.
A SOPARFI can invest in shares, bonds, real estate, loans, investment portfolios, and other financial assets, and is used in general for the management of participations in subsidiaries located in different jurisdictions and for international holding. Investors interested in centralized administration of international investments and corporate participations frequently use the structure.
What legal forms are available for a SOPARFI?
A financial holding company can be incorporated as a public limited company (Société anonyme – SA), a private limited liability company (Société à responsabilité limitée – Sàrl), or a partnership limited by shares, and it can be established by individuals, companies, trusts, foundations, or investment funds.
What are the tax aspects of an SOPARFI in Luxembourg?
The tax treatment of a SOPARFI depends on its activity, structure, and the type of investments performed by the company. Depending on the applicable conditions, the structure may fall under Luxembourg double taxation treaties.
It is important to know that a SOPARFI may benefit from certain advantages, such as exemptions from withholding tax or exemptions from tax on dividends or net assets. However, the tax regime that applies in this case may vary depending on the type of investment it makes, but also on the origin of the income and the jurisdictions involved in the commercial activities of your companies.
For example, those who want to open an investment fund in Luxembourg or an investment company must know that the net wealth tax is generally imposed at a rate of 0.05% on the value of taxable assets of a given entity. Exemptions to pay this tax may apply if participation with capital is at least 10%, or investment value is at least EUR 1.2 million.
Our legal advisors in Luxembourg can provide support on the operational and legal aspects related to SOPARFI companies.
We invite you to read our infographic on the advantages of wealth management in Luxembourg:
What other investment structures are available in Luxembourg?
Luxembourg also offers other investment vehicles commonly used by well-informed investors interested in alternative assets, private equity, and real estate investments.
- Specialized Investment Fund (Fonds d’investissement spécialisé – SIF) used for investments such as real estate, private equity, and alternative assets. The SIF is supervised by the Commission for the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier – CSSF).
- Investment Company in Risk Capital (Société d’investissement en capital à risque – SICAR), which is designed for risk capital investments and well-informed investors.A
- Reserved Alternative Investment Fund (Fonds d’investissement alternatif réservé – RAIF) that is regulated by the Luxembourg Law of 23 July 2016 and must be managed by an Alternative Investment Fund Manager (Gestionnaire de fonds d’investissement alternatif – AIFM).
These investment structures are generally used by well-informed investors interested in alternative assets, venture capital, private equity, and international investment opportunities.
The applicable legal framework depends on the selected investment vehicle and its activities. Depending on the selected structure, investors may also be subject to different regulatory, reporting, and management requirements under Luxembourg legislation.
What advantages does Luxembourg offer for international wealth management and investments?
This country offers investors political and economic stability, a strong banking sector, experienced financial professionals, international investment structures, access to European markets, a favorable legal framework, and a modern financial services industry.
Luxembourg is a favored country from several perspectives. One of the most important advantages is that this country benefits from a strategic position in Europe, a financial market regulated in accordance with European Union legislation, and a multilingual professional environment specializing in international finance and investment services.
Another essential aspect in recognizing this country at the European level is that it benefits from a developed market of investment funds and the availability of specialized financial and legal services.
Can investors receive assistance for wealth management in Luxembourg?
Investors who plan to manage their wealth in Luxembourg can receive assistance for selecting suitable investment structures, incorporating companies and investment vehicles, understanding tax obligations, asset management planning, investment fund administration, and relocation and residency support.
If you are an investor and you need more information on wealth management services and investment structures in Luxembourg, please contact our specialists for assistance regarding incorporation, taxation, and investment planning.