Luxembourg non Regulated Investment vehicles
SPF – the abbreviation for “Société de gestion de Patrimoine Familial”, refers to a simple, flexible wealth management vehicle that facilitates the administration and management of wealth on behalf of individuals while ensuring tax neutrality.
The Luxembourg Family Wealth Management Company – Overview
A Luxembourg Family Wealth Management Company (SPF) is a dedicated vehicle with the sole purpose of holding and managing the private wealth of individuals or families. A SPF is a company with legal personality not subject to corporate income tax, municipal business tax and net worth tax.
Eligible investors of an SPF are: (i) private persons managing their own wealth; (ii) private wealth management entities acting for one or more individuals (family offices, trusts) and (iii) intermediaries acting on behalf of categories (i) & (ii).
A SPF is not subject to any supervisory authority and can be quickly set-up without prior authorization.A SPF is subject to the Luxembourg Law of May 11th 2007 and can take four legal forms:
? Public Limited Company (SA – Société anonyme) with a minimum capital of EUR 31,000 (contributed in cash or in kind); bearer or registered shares; unlimited number of shareholders (resident or not, individuals or legal entities); managed by a board of min. three directors (reduced to one if only one shareholder);
? Limited Liability Company (Sàrl – Société à responsabilité limitée) with a minimum capital of EUR 12,500 (contributed in cash or in kind); registered shares; from 1 to 40 shareholders (resident or not, individuals or legal entities); managed by one or more managers;
? Partnership Limited by Shares (SCA – Société en commandite par actions) with a minimum capital of EUR 31,000 (contributed in cash or in kind); bearer or registered shares; Min. 2 shareholders (resident or not, individuals or legal entities);
? Cooperative Company organised as a Public Limited Company (SCoSA – Société coopérative organisée sous forme de Société anonyme) with a minimum of 3 investors.
A SPF may hold any types of financial assets located either in Luxembourg or abroad including:
? Stocks, unlisted shares, bonds,
? Investment funds;
? Cash, securities, currencies, commodities,
? Loans, contract notes,
? Derivatives and structures productsA SPF cannot hold intellectual property and may not invest directly into real estate (but is allowed to acquire participations in corporations or other non-transparent entities that hold real estate)
The main features of the tax treatment of a SPF are the following:
? Fully tax-exempt vehicle not subject to corporate income tax, municipal tax and net worth tax;
? Subject to an annual subscription tax at a rate of 0.25% (based on the paid-in capital including capital premium as well as on any debts in excess of 8 times the paid-in capital) with a minimum of EUR 100 and a maximum of EUR 125 000 per year;For non-resident shareholders:
? Capital gains on holdings within the SPF or on the liquidation of the SPF not subject to Luxembourg tax
? Dividends distributed to non-residents not subject to withholding tax
? Interest payments distributed by an SPF not subject to withholding tax except if the payment falls within the scope of the European Savings Directive
? SPF does not benefit from access to double tax treaties