1. Introduction to SOPARFI
SOPARFI, short for Société de Participation Financière, is a widely used commercial entity in Luxembourg. Unlike a specific legal structure, SOPARFI is a broad term encompassing various legal forms, with private limited liability companies (S.à r.l.) and public limited liability companies (SA) being the most common. These entities are established under the Commercial Companies Law 1915 (as amended), which sets forth specific requirements, including minimum share capital – €12,000 for S.à r.l. and €31,000 for SA. Here are the 10 key aspects of Luxembourg SOPARFI about its formation and operations.
2. Legal Forms of SOPARFI
SOPARFI entities primarily take the form of S.à r.l. or SA. S.à r.l. structures are suited for smaller operations with a maximum of 40 shareholders, while SA structures, with a minimum of three board members, are better suited for larger ventures. Understanding these legal distinctions is crucial when considering SOPARFI for your business endeavors.
3. Incorporation of a SOPARFI: Step by Step
Incorporating a SOPARFI in Luxembourg involves a distinct process, overseen by a public notary. Regardless of the chosen legal form, the steps remain similar and encompass the following key elements:
4. Drafting Articles of Incorporation
Before establishing a SOPARFI, the founder(s) must prepare the Articles of Incorporation, which include essential details such as the founder’s name, registered address, share capital, types of shares, manager identification, financial year-end, and auditor information if necessary.
5. Opening a Bank Account
Next, initiate the process of opening a bank account for the SOPARFI. This step involves submitting Client Due Diligence documents for immediate owning and controlling parties, ultimate beneficial owners, draft articles of incorporation, and completed bank account opening forms, along with transferring the share capital to the bank account.
6. Obtaining a Blocking Certificate
Once the capital is transferred, the bank issues a blocking certificate. This certificate confirms to the public notary that the share capital is securely held, awaiting incorporation but not available for use at this stage.
7. Incorporation by the Public Notary
An appointment is scheduled with the public notary, who reviews the provided documents, including the blocking certificate, signed declarations of ultimate beneficial owners, powers of attorney (often given to a corporate administrator), and the draft articles of incorporation. Once satisfied, the public notary executes the articles of incorporation, officially incorporating the SOPARFI, enabling it to engage in transactions.
8. De-blocking the Bank Account
Following incorporation, the public notary issues a de-blocking certificate, which is provided to the bank. The bank then confirms the SOPARFI’s bank account is fully operational, granting access to the funds for the company’s use.
9. Registration with the Luxembourg Trade and Companies Register
The final step involves the public notary registering the articles of incorporation with the Luxembourg Trade and Companies Register, making the SOPARFI‘s existence publicly known and legally recognized.
10. Timeline for SOPARFI Incorporation
It is crucial to initiate the SOPARFI incorporation process early and work closely with a domiciliation agent. Under optimal conditions and with all necessary Client Due Diligence documents in order, SOPARFI incorporation can be completed within two to three business days. However, when complex provisions in the articles of association are required, it is advisable to allocate additional time for the formalities.
In conclusion, SOPARFI entities in Luxembourg offer versatile options for business operations, with different legal forms catering to various needs. Understanding the incorporation process and timeline is essential for anyone considering the establishment of a SOPARFI. By adhering to the necessary steps and requirements, entrepreneurs and businesses can leverage the benefits of SOPARFI structures to facilitate their financial activities in Luxembourg.
To register your Luxembourg holding company, then, please contact your Damalion expert now.
