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A Luxembourg SPF is set up for private wealth investment (SPF — Société de Gestion de Patrimoine Familial)

 

A Luxembourg SPF can be set up under the legal form of a public limited liability company (SA), a private limited liability company (Sàrl), a corporate partnership limited by shares (Seca), or a cooperative society.

 

The purpose of a Luxembourg SPF is limited to the acquisition, holding, management and disposal of financial assets, with any type of commercial activity prohibited. The shares must be exclusively held by eligible investors who are:

• individuals managing their private wealth

• private wealth entities acting for one or several individuals

• intermediaries acting on behalf of private investors.

 

A Luxembourg SPF is not authorised to issue public bonds and cannot be listed on the stock market.

 

The assets that can be held by a Luxembourg SPF are financial instruments such as shares in companies, other securities equivalent to shares/units in companies, undertakings for collective investment, bonds and other forms of debt instruments, as well as cash and assets of any kind held in a bank account. This includes investments in structured products or derivatives, put/call options on securities, indexes and currencies.

 

A Luxembourg SPF may also hold participations in the share capital or the voting rights of other companies, but only to the extent the Luxembourg SPF does not involve itself in the management of these companies. It is also not allowed to render any kind of services, including granting interest bearing loans, even to companies in which the Luxembourg SPF holds a participation.

 

However, a Luxembourg SPF is allowed to make advances or guarantee liabilities of a company in which it holds a participation, but only on an ancillary and non-paid basis. A maximum debt/equity ratio of 8:1 applies.

 

A Luxembourg SPF is exempt from corporate income tax, municipal business tax and net worth tax, provided it does not derive 5% or more of its dividend income from non-resident and non-listed companies which are not subject to income tax comparable to Luxembourg income tax (EU companies qualify if they fall within Article 2 of the EU Parent Subsidiary Directive, while for others a 10.5% minimum tax rate on comparable basis is requested).

 

A Luxembourg SPF is subject to a fixed capital duty of €75 and to subscription tax at a rate of 0.25% on its share capital, including any share premium. The minimum is €100 and the maximum is €125,000 a year. Subscription tax also applies to the part of the debt that exceeds the debt/equity ratio of 8:1, as this part will be requalified into equity and, thus, subject to subscription tax in the same way as share capital.

 

 

 

LUXEMBOURG SPF - PRIVATE WEALTH COMPANY