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Luxembourg - SOPARFI Business Registration

A 1990 Société de Participation Financiére (SOPARFI) is a Luxembourg commercial company with an exclusive holding company objects clause.

The SOPARFI is commonly used in Luxembourg for both holding and financing structures and can engage in ancillary activities such as investment management, financing, real estate ownership, holding intellectual property rights or conducting commercial and industrial activities.

Luxembourg has managed to conform to the European Commission Directives on dividends and capital gains in such a way that the Luxembourg SOPARFI is one of the most efficient holding companies in Europe.

The 1990 SOPARFI is a normally taxed European company, subject to full taxation and is fully protected and subject to the provisions of Luxembourg's double tax treaties. Luxembourg has however managed to conform to the European Commission Directives on dividends and capital gains in such a way that the Luxembourg Soparfi is one of the most efficient holding companies in Europe.

A SOPARFI can be established as a Public Limited Company (SA) or a Private Limited Company (Sàrl).

Advantages of a SOPARFI Company

Provided the Soparfi complies with certain conditions, the following tax advantages are available:

  • Tax exemption on dividend income from qualified investments
  • Tax exemption on capital gains from disposal of qualified investments
  • Wealth Tax exemption on investments
  • No withholding tax or reduced rates under double tax treaties on distribution of dividends
  • No withholding tax on interest paid (with exception to resident individuals and when savings directive applies)
  • No withholding tax on royalties paid
  • No withholding tax on liquidation surpluses and distributions of reserves
  • Back to back loans between companies with a low margin of 0.25%
  • May benefit from the double taxation agreements (40 countries) and the parent-subsidiary directive as a result of the European Directive 90/435/CEE

The SOPARFI being subject to Luxembourg corporation tax, falls within the scope of Luxembourg’s Double Tax Agreements, and is less vulnerable to anti-avoidance legislation in the country of residence of the Shareholders.

The Company can benefit from the fiscal measure of SOPARFI (Société de Participation Financiére)

That means that:

  • The company can hold participations (minimum 10 % with a holding period of one year) in other companies and benefit from an exemption of capital gains tax
  • The company can benefit from international conventions and treaties (non double taxation, dividends)

What SOPARFI can do

  • Be subsidiaries' shareholder and collect dividends
  • Own real estate properties and receive rents or capital gains
  • Manage its own financial assets such as bonds, quoted shares, etc.
  • Hold Intellectual Property and receive royalties
  • Be another company's director

Restrictions on Trading

The 1990 Soparfi is normally set up as a holding company. The 1990 normal Luxembourg Trading and Investment Company with SOPARFI provisions has no trading restrictions other than without the appropriate licences it may not undertake the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes and any other activity that may suggest an association with the banking and insurance industries.

Language of Legislation and Corporate Documents

The Legislation is published in either French or German. The corporate documents can be in any language, provided they are accompanied by a French or German translation.

Registered Office

A Registered Office is required and must be maintained in Luxembourg. We offer a registered office service in Luxembourg.

Procedure to Incorporate

We prepare The Acte de Constitution (Articles of Incorporation) which, must be prepared in the form of a deed.

This deed we draw up for your SOPARFI includes:

  • Name of the person(s) wishing to form the corporate entity
  • Registered Office Address
  • Amount and currency of the authorised and issued share capital.
  • Type of shares and classes
  • Amount of capital paid up
  • Voting rights and shares
  • Names, addresses and nationalities for the proposed directors and auditors
Then:
  • A Certificate of your Company name acceptability is issued by the Trade Register
  • This is required, together with a Certificate of Blockage produced by the proposed company's Luxembourg bankers confirming that the paid capital has been deposited with them
  • We present these documents and information are presented before our Notary Public by the proposed company's appointed representative
  • After notarisiation, the Notary Public lodges the Articles of Incorporation and By-Laws with the Department of Registration and Trade Register
  • The Articles of Incorporation are then published in the Official Gazette

Authorised and Issued Share Capital

The minimum share capital for a Ltd Soparfi company is €12,500. The minimum share capital to suscribe for a PLC Soparfi is €31,000 but the company need only pay 25% (€7,750) when the company is incorporated.

The capital can be expressed in any currency.

Types of Luxembourg holding Company - SOPARFI

A SOPARFI Can be established as a Public Limited Company or a Private Limited Company.

Company Type

Limited Liability company

Soparfi Holding Gesellschaft mit beschränkter Haftung (GmbH)

Public Limited Company

Soparfi Holding Aktiengesellschaft (AG)

Share Capital Minimum of €12,500 - must be fully paid up Minimum of €31,000 - 25% of which must be paid up
Shareholders Minimum of 1 Shareholder Minimum of 2 - Shareholders may be either individuals or corporate bodies
Shares No shares, but stakes

Different classes of shares with different rights, such as profit sharing, redeemable preference shares and voting rights may be issued.

Directors

Minimum of 1 director

Minimum of 3 - Directors may be either individuals or corporate bodies

They may be of any nationality and need not be resident in Luxembourg

Registered Office Registered Office address must be in Luxembourg, we can if required provide a registered office service Registered Office address must be in Luxembourg, we can if required provide a registered office service
Entry in the Public Register Commercial register, Registre de Commerce et des Sociétés Commercial register, Registre de Commerce et des Sociétés
Disclosure Directors and Shareholders must be published in the commercial register. Anonymity can be retained through nominees Complete details of Directors and Shareholders must be published in the commercial register. Anonymity can be retained through nominees
Suffixes Société à responsabilité limitée, GmbH or SARL; The extension  'Holding' is required Société Anonyme, SA or AG. The extension 'Holding' is required
Financial Statements Financial statements must be submitted to the commercial register but, they are not published Financial statements must be submitted to the commercial register but, they are not published