FMV & Partners SA - Certified Public Accountant in Luxembourg

Soparfi : the Luxembourg holding company

You are looking for an european holding company to hold subsidiaries, real estate or intellectual property ? The Luxembourg Soparfi is the most effective type of Luxembourg holding company. May we tell you more about all its opportunities.

Soparfi (Société de participations financières) refers to a type of Luxembourg holding company which benefits from very interesting tax advantages.
Here are some key points of its tax benefits.

What is it ?

A Soparfi is a Luxembourg holding company that, according to its object, may:

  • Be a company shareholder and receive dividends from its subsidiaries.
  • Own intellectual property rights and invoice royalties,
  • Be director of its subsidiaries and invoice management fees,
  • Own any kind of wealth (real estate, quoted shares, etc.).

Basically a this kind of company is targeted to cash dividends (so securize the subsidiaries cash) and reinvest them into new activities or wealth.

Which tax system ?

Here are its tax benefits :

  • tax on the dividends collected from subsidiaries : 0%
  • tax on capital gains realized on subsidiary shares selling : 0%
  • tax on capital gain after liquidation : 0%
  • benefits from art 166 LIR (Luxembourg) and the European Directive called "Parent/ Subsidiary" : yes.

Which legal basis ?

It refers to the 166 art of the tax code, in accordance with a 1989 european Directive.

The Soparfi legislation is stable and efficient from back then that is why lots of companies (big ones as medium sized ones) have chosen this solution.

Soparfi and trading activity

As the Soparfi is not supposed to have a trading activity, it is not usually VAT registered. Unless, if it has an activity like services providing to its subsidiaries or IP licensing, it can get a VAT registration.

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