Luxembourg is a small European country known for its stability, political neutrality, and pro-business policies. It has become an attractive destination for international investors looking to protect their assets and grow their wealth. One of the ways they achieve this is by setting up a Luxembourg holding company.
What is a SOPARFI (Société de Participations Financières)?
A Société de Participations Financières (SOPARFI) is a type of holding company that operates in Luxembourg. It is used to manage and hold investments, and has become a popular structure for investors seeking to protect and grow their wealth.
You may know more thanks to our video dedicated to SOPARFI.
Principles of a SOPARFI
A SOPARFI operates on the principles of flexibility, tax efficiency, and confidentiality. It can be used to hold a wide range of assets, including stocks, bonds, real estate, and intellectual property. The company’s profits are taxed at a low rate, and its shareholders enjoy the confidentiality and protection of Luxembourg’s strict banking laws.
Types of Legal Structures
There are several legal structures that can be used to set up a Luxembourg holding company, including a public limited company (SA), a private limited company (SARL), and a limited liability company (Sàrl). Each type has its own advantages and disadvantages, and investors should choose the one that best fits their needs and goals.
Tax Regime
One of the main reasons why investors choose Luxembourg as the location for their holding company is the favorable tax regime. Luxembourg has a well-established tax system that offers low tax rates, tax exemptions on dividends. The country also has a network of double tax treaties with more than 80 countries, making it an ideal location for international investment.
Family Business Groups
Luxembourg’s SOPARFI is also a popular choice for family business groups seeking to structure their investments in Europe and abroad. It provides a flexible, tax-efficient, and confidential way to manage and hold assets, while protecting the interests of family members. Family business groups can use the SOPARFI to invest in a range of assets, including stocks, bonds, real estate, and intellectual property.
Luxembourg’s SOPARFI is a versatile and attractive structure for international investors looking to protect and grow their wealth. With its low tax rates, tax exemptions, and tax credits, as well as its network of double tax treaties, Luxembourg is an ideal location for investment. Whether you’re a family business group or an individual investor, a Luxembourg holding company can provide the flexibility, tax efficiency, and confidentiality you need to succeed.
To setup your SOPARFI, please contact your Damalion expert.
