The financial landscape in Italy is complex, with high taxes being a major issue for many individuals and businesses. This can make it difficult for Italian business families to protect their assets and grow their businesses. However, there is a solution: setting up a Luxembourg SOPARFI. (Read: the Luxembourg SOPARFI guide for more details)
Economic ties between Luxembourg and Italy
Luxembourg and Italy have strong economic ties, making it a logical choice for Italian business families to consider setting up a SOPARFI in the Grand Duchy of Luxembourg. A SOPARFI, or Société de Participations Financières, is a holding company that allows for the efficient management of assets and the reduction of tax liabilities.
The high taxes paid by Italian individuals and businesses are a significant concern for many business families. In contrast, Luxembourg is known for its favorable tax climate and its commitment to attracting foreign investment. By setting up a SOPARFI in Luxembourg, Italian business families can benefit from the lower tax rates and the protection of their assets.
Luxembourg holding company offers tax exemption on dividends and capital gains
One of the biggest advantages of the SOPARFI is the tax exemption on dividends received. This means that the SOPARFI is not taxed on any dividends received from subsidiaries, which can be reinvested back into the business. This allows for the growth of the business without incurring a significant tax burden. The conditions of this tax exemption include the requirement that the SOPARFI holds at least 10% of the capital of the subsidiary, and that the subsidiary is located in a country with a tax treaty with Luxembourg.
In addition to the tax exemption on dividends, the SOPARFI also benefits from the tax exemption on capital gains realized. This means that the SOPARFI is not taxed on any capital gains generated from the sale of shares in a subsidiary. The conditions of this tax exemption include the requirement that the SOPARFI holds at least 10% of the capital of the subsidiary and that the shares are held for a minimum of 12 months.
The double tax treaty between Italy and Luxembourg is another important consideration for Italian business families. This treaty ensures that individuals and businesses are not taxed twice on the same income, as long as certain conditions are met. This can provide peace of mind for Italian business families and reduce the tax burden on their businesses.
Luxembourg SOPARFI as a strategic choice for Italian business families
Setting up a Luxembourg SOPARFI offers numerous advantages for Italian business families, including the reduction of tax liabilities and the protection of assets. The economic links between Italy and Luxembourg, as well as the favorable tax climate and double tax treaty, make it an attractive option for those looking to protect their assets and expand their businesses. By taking advantage of the benefits of the SOPARFI, Italian business families can ensure the growth and success of their businesses for years to come.
Damalion experts has been serving Italian families for many years. Contact your Damalion expert now to setup your Luxembourg holding company and assist you to achieve your business goals.
