LUXEMBOURG – SOCIETE DE PATRIMOINE FAMILIALE (SPF)

The Luxembourg government launched the “Societe de Patrimoine Familiale” (SPF) as a private asset management company in order to replace and be applied to around 80% of the 1929 holding companies regime found to be in violation of providing “unjustified tax advantages” by the European Commission. Exempt from corporate income tax and several other taxes provided they comply with certain conditions.

REQUIREMENTS

• Number of individual shareholders limited – cannot be listed on the stock exchange
• Prohibited from commercial activity and limited to acquisition, detention, management and realization of financial assets such as:
• Shares, obligations, securitization funds, variable capital companies, deposit accounts, structured products, hedge funds, precious metals, options, warrants, indices, currencies…
• It can however hold a subsidiary company which can carry out such operations.
• Shares can be nominative or bearer, but must not be quoted.
• SARL: capital 12 500 €, one associate, one Director

SA: capital 31 000 € (at least 1/4 paid up), at least one shareholder and one director, one auditor
SCA: capital 31 000 € (at least 1/4 paid up), at least two shareholders and three directors, one auditor
COOPSA: Co-operative Company having adopted the Form of a Limited company, at least three associates, 3 directors. 

• Shareholders must be 1) resident or non-resident individuals other than a faily group, office, investment club, group of investors managing private savings; or legal entities known as managing patrimonial assets ie trusts, private foundations
• Annual check by domiciliation agent/chartered accountant/auditor certifying that: the SPF is held only by qualified investors; it does not perceive more than 5% of its dividends coming from companies outside the EU taxable at less than 11%; it respects its obligations as a paying agent following the “relibi” law.
• File annual accounts and statements
• No VAT registration

TAXATION EXEMPTIONS

• Capital Duty 0.5% at the constitution with possibilities of exemption:
• 65% reduction when majority of shares is of a company domiciled in the EU
• Transfer of domiciliation from an EU Member State to Luxembourg
• When there is a change in the form of a Luxembourg Company into an SPF form
• Incorporation of reserves or deferred capital
• If no more than 5% of its dividends  come from non-resident or non-quoted companies (Ex EU) whose rate of taxation is lower than 11% (this measure only applies to dividends coming from these companies
• Total exemption of income tax for any profits, dividends and benefits carried out for social purposes
• Exempt from wealth tax and interest royalties
• 10% withhold on interest and debts paid to recipient, if Luxembourg resident; or 15% in non resident
• 20% withhold on directors’ fees
• Exemption for non-resident person on tax on liquidation profit
• Exemption for non-resident person on tax on capital gains on SPF shares

For More information email us or call on +44 (0)208 421 7470