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Registering an SPF in Luxembourg: peculiarities of regulation in 2020

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By setting up an SPF in Luxembourg an individual or a family can easily hold and manage their financial assets such as: futures, options, bonds, derivatives, shares and many other related instruments.

The SPFs are exclusively designed for businessmen, who are aimed at attracting investment and want to structure their property in the most appropriate way.

If you are interested in registering a private wealth management company in Luxembourg, please contact IQ Decision team. Our specialists can provide you with qualified advice on opening an SPF.

Those, who decide to open a private asset management company in Luxembourg, can enjoy the following:

  • SPF is a separate legal entity with limited liability;
  • Flexibility of investment schemes;
  • The ability to deal with reliable and proven co-investors;
  • An expedient distribution of risks;
  • Attractive tax treatment;
  • Relatively fast and simple process of establishing an SPF in Luxembourg (minimal requirements for initial share capital).

Since, the private asset management company is a separate legal entity, then the liabilities of investors directly depend on their amounts of contributed share capital. Thus, the level of responsibility to third parties is significantly reduced, especially in cases of lending operations regarding property management.

SPF financing approach

The opening of an SPF in Luxembourg can be useful for such purposes as:

  1. Family assets structuring;
  2. Matrimonial property administration;
  3. Inherited property administration.

There are no limitations for ways of SPF financing. The funds can be obtained from lending institutions, as well as from other investors or SPF's shareholders.

Those, who will register an SPF in Luxembourg are entitled to hold, acquire and sale financial assets, but they are prohibited from:

  • Holding IP or real property (directly). Meanwhile, private wealth management companies can hold IP or real estate through other organizations;
  • Providing services (with certain exceptions);
  • Conducting commercial activities. However, the SPF can hold its participations in companies engaged in business activities;
  • Entering into insurance contracts (related to life insurance);
  • Engaging in management of the companies, where the SPF holds its participations. Exceptions: SPF's shareholders and investors.
SPF investors

According to Luxembourg legislation, the SPF's investors can be:

  • Intermediaries (third parties);
  • Individuals managing their own property;
  • Investors of other SPFs, registered in Luxembourg or in any other country.

It is worth noting, that family ties are not mandatory for registering a private asset management company in Luxembourg. The SPF is used to ensure access of mentioned above investors to private individuals.

In addition, shares of SPFs cannot be used for IPO or public offerings on a stock exchange.

Read also:
SPF special tax treatment

Tax types

Tax rates

Corporate income tax

0%

Capital gains tax

0% (in some cases)

Income tax (for resident individuals)

under Luxembourg laws

Income tax (for non-resident individuals)

under tax system requirements of the country of residence

*All SPFs are subject to subscription tax of 0,25%, that is paid annually (ultimate limit is 125 thousand euros).

**If you will set up an SPF in Luxembourg, you won't be able to benefit from DTA agreements.

SPF registration process

Those, who intend to establish an SPF in Luxembourg, will need to:

  1. Open an SA (Public LC);
  2. Register a SARL (Private LC);
  3. Set up an SC (Cooperative); or
  4. Open an SCA (Partnership).

Also, while planning to set up a private wealth management company in Luxembourg, you must to know that SPF is entitled to:

  • Sign the contracts with financial companies, investment and financial advisers and other service providers;
  • Rent real estate;
  • Hire staff.

Another advantage is the absence of requirements regarding obtaining additional licenses or permits for SPFs.

To order personal advice and legal assistance in registering an SPF in Luxembourg, please call IQ Decision experts using the contacts listed below. We will provide you with a full range of services and comprehensive support at all stages of starting a business.

  • The information outlined in the article is actual at the time of its publication.

  • Please refer to our specialists for checking possible solutions for your business.

  • Still have any questions?

    Fill out the form or contact us as you find convenient: skype, telegram, etc. Our experts will help you resolve the issue.

Are you interested in qualified advice from our specialists on this matter?

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