The Société de gestion de Patrimoine Familial (SPF) is Luxembourg’s private wealth management company that benefits from a preferential tax regime and acts solely for the management of the financial assets of an individual or a group of individuals.
Why Luxembourg for your family wealth management company?
The rise of Luxembourg as a top financial center in addition to the tax advantages it offers makes it a reliable jurisdiction for SPF structure.
Luxembourg has a long-established extraordinary international financial services reputation. It has an unrivaled range of investment fund solutions plus an integrated of service providers with vast expertise and the ability to meet distinct local and international markets. All these in addition to its political, economic, social, legal, and tax stability, make Luxembourg an ideal jurisdiction for the SPF structure.
Features of the Luxembourg SPF
| Practical use of the SPF | The SPF is built as an investment company exclusively for the use of natural persons engaging in the management of their private wealth. |
| Applicable legislation | Law of 11 May 2007 (“SPF Law”), Luxembourg Memorial about SPF |
| Eligible investors | – Private investors – Entities serving the interest in regard of the private property of one or more individuals (e.g. Trust, private foundation or similar entities) – Mediators acting on behalf of either one stated above |
| Eligible assets | SPF‘s exclusive purpose must be the acquisition, holding, management and disposal of financial asset. Prohibited activities: – Commercial and industrial activities are prohibited from the SPF law. – Direct investment in real estate by an SPF is excluded from its corporate goal. – The holding of patents and trademarks is prohibited. – Also, intellectual property rights are regarded as a commercial activity and cannot be owned or managed by the SPF. |
| Risk diversification requirements | The SPF doesn’t have risk diversification requirements. |
| Legal Forms of the SPF | Public limited company (S.A.) Private limited liability company (S.à R.L.), Partnership limited by shares (S.C.A.), Cooperative in the form of a public limited company (ScoSA) |
| Segregated compartments | No |
| Capital requirements | Minimum capital differs depending on the legal form (e.g. S.A./S.C.A.: € 31,000; S.àR.L.: €12,000) |
| Net asset value (NAV) calculation and redemption policy | Not required |
| SPF Taxation | The SPF is exempt from corporate income tax, municipal business tax and net worth tax No tax on capital gains and liquidation proceeds earned by non-resident investors Distribution of dividends to investors is not subject to any withholding tax Subscription tax at a rate of 0.25% No withholding tax on interest payment (except if EU Savings Directive applies) No access to tax treaties and European directives Not subject to VAT obligations |
| Authorisation and supervision by the Commission de Surveillance du Secteur Financier (CSSF) | No authorisation required |
| European passport | No |
| Thin capitalization rules (debt-to-equity ratio) | The SPF is subject to annual subscription tax rate of 0.25%, from the paid-up capital or the part of the debt that is over eight (8) times the amount of the paid-in share capital. |
In addition, the Securities issued by an SPF can not be placed in a public offering or listed on a stock exchange.
The SPF is a passive investment vehicle that can be a very effective aid in the context of inheritance. This list is not all-out, as the SPF is interesting in many other situations.
For more details about the SPF and other investment funds in Luxembourg, let’s go ahead and contact your Damalion expert now.
