Soparfi Luxembourg Holding and Finance Company is an appealing jurisdiction for private investors, institutional investors, and multinational groups looking to establish a holding company. With its strategic location right in the center of Europe, the Grand Duchy of Luxembourg is the crucial center of the European Union. The country boasts stellar regulatory, political, and social stability, enjoying high marks across all rating agencies. Luxembourg’s dynamic and diverse population further adds fuel to its booming financial services market. It’s not surprising that the country is known the world over as a premier financial center for high-net-worth investors and organizations.
At present, the Luxembourg financial market offers a wide range of financial solutions. The country facilitates the seamless connections between investors and markets from all over the globe. It upholds its reputation as the second largest investment fund domicile next to the United States.
The Luxembourg holding company also called SOPARFI
One of the most popular investment vehicles is the Luxembourg holding company or Soparfi. Here are a few key pieces of information that potential investors should know it:
- Soparfi is an ordinary, unregulated holding company that is allowed to operate as a commercial company in Luxembourg. With that in mind, it is a fully taxable company under prevailing Luxembourg laws.
- Investors incorporate a Soparfi primarily for holding and financing reasons.
- Under the participation regime, Soparfis take advantage of corporate tax exemptions on dividends, net wealth, and capital gains for eligible participations.
- This investment vehicle does not assess Luxembourg withholding tax to outbound dividends from shareholders.
- Soparfis gain full access to Luxembourg’s extensive double taxation network and several EU Directives.
The most common legal forms that investors can choose from as part of the incorporation process include:
- Private limited companies (SARL)
- Public limited companies (SA)
Criteria for Participation Exemption for Dividends Received and Capital Gains Realized from Shares
- A holding company (parent company) must hold at least 10% share capital of the subsidiary.
- Participation with an acquisition value of at least €1.2 million. The threshold is significantly higher for capital gains exemption set at €6 million.
- Qualified participation must be held for at least 12 months.
Key Information on Share Capital of Luxembourg Soparfis
Under the Commercial Companies Law 1915, the minimum share of Soparfi legal forms are as follows:
Steps in Soparfi Incorporation
Regardless of legal form, a Soparfi company is incorporated using the following steps:
Drafting Articles of Incorporation
- Name, registered address, contact number (corporate, information of founder/s)
- Name and registered address of the company to be formed
- Share capital and preferred currency
- Value and type of shares of the Soparfi, indicating specific share classes
- Identification documents of delegated manager/s
- Financial year-end and name of auditor/s
Opening a bank account
- Filing of client due to diligence documents to ensure immediate owning and controlling of beneficial owners
- Draft of articles of incorporation
- Bank account forms to be filled by a delegated manager/s
- Declaration of beneficial ownership signed by Soparfi beneficial owner/s
- Transfer form of the share capital of the company on to bank account
Upon opening a bank account, the bank will issue a blocking certificate which needs to be notarized by a certified public notary in Luxembourg. This functions as confirmation that share capital is inside a blocked account for incorporation purposes only and will not be available for use.
Incorporation of Soparfi through a public notary
The following are submitted to a public notary:
- Blocking certificate of the funds
- Signed declaration form including the names of beneficial owners
- Powers of Attorney signed by Soparfi shareholder/s that signify administrators are confirmed, shareholder representatives
- Draft Articles of Incorporation
Once a public notary is satisfied with the submitted documents, the Articles of Incorporation will be executed along with shareholder/s and their respective attorneys. From hereon after, a Soparfi company is incorporated and starts engaging in transactions.
A public notary will issue a de-blocking certificate, which will then be forwarded to a bank. The bank in return will confirm the bank account is fully operational and that funds are at Soparfi’s full disposal.
A Soparfi’s Articles of Incorporation will be published by the public notary on Luxembourg’s Trade and Companies Register.
Soparfi Incorporation Duration
Early engagement is highly recommended should you wish to start operations as soon as possible. Depending on the speed at which investors can gather all pertinent data and fulfill activities mentioned above, Soparfi incorporation can be completed within two to three business days.
If your company’s Articles of Association include more complex provisions, shareholders must prepare ahead of time to take care of requirements.
As an independent consulting firm in Luxembourg, we pride ourselves on impeccable guidance and support in the incorporation of investment vehicles, including Soparfis, family private wealth management companies in Luxembourg. Using our wide network of affiliations with various professionals, we can streamline Soparfi incorporation to give our investors peace of mind. To learn more about how to incorporate a Soparfi, a holding company in Luxembourg , please reach out to a Damalion expert today.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
