Why choose a SPF?
There are a number of taxation benefits to the SPF, such as exemptions from withholding tax and value-added tax, as well as exemption from taxes related to sale of shares as a non-resident shareholder. Additionally, an SPF is Luxembourg can start conducting its activities without an official license.
Definition
SPF stands for Societe de gestion de patrimoine familial and refers to a tax regime, which is most suitable for the management of family assets or matrimonial property. This type of company is one that is required to abide by Luxembourg’s law on SPFs and this must be explicitly stated in the company’s articles of association. In order to form a SPF, the company’s articles of association must be recorded by a notary. After this, these articles of association must be published in the Official Bulletin (Memorial C) and lodged with Luxembourg’s Trade and Companies Register. Natural persons, regardless of residency, family groupings, investor groups, Trusts and private foundations may all be shareholders in a SPF. Corporations may not be shareholders in a SPF.
Legal form
The following legal forms are the only ones permitted to be formed by a Private Asset Management Company:
– Public Limited Company (PLC., Corp./SA)
– Limited Liability Company (LLC., Ltd./SARL)
– Partnership Limited by Shares (SCA)
– Co-operative in the form of a Public Limited Company (SCOSA)
It should be noted that the most common legal forms are PLC and LLC.
Company purpose
The main purpose of SPF is the acquiring, holding, managing and realizing of investments in financial instruments such as shares, funds, bonds among others. SPFs are not allowed to conduct commercial activity or trading. They are also not allowed to directly own real estate, to hold patents or rights or to lend financial services to third parties.
Taxation
A SPF is required to pay a subscription tax on its paid-up share capital, the share premium and the share premium plus on debts greater than 8 times its share capital. This amount is taxed at an annual rate of 0.25%. Additionally, SPFs do not benefit from Double Taxation Agreements that Luxembourg have with other countries. This means that these companies are required to pay taxes to different countries.
There are a number of advantages of a SPF related to tax exemptions. This type of company is exempt from corporation tax, municipal business tax or net wealth tax. Liquidation proceeds and sale of shares by a non-resident are also exempt from taxation. Since they are not permitted to conduct commercial activities, SPFs do not pay value added tax.
If you are interested in setup a Private Asset Management Company (SPF) please contact us at info@luxstart.lu
