SPF

The law of May 11, 2007 (Mémorial A-No. 75 of 05/14/2007) outlines the purpose of the Family Wealth Management Company (SPF) as follows:

“The acquisition, holding, management, and realization of financial assets, excluding any commercial activity.”
The SPF is a capital company (SA, SARL, SCS, SCA, SC organized as an SA) held by targeted investor groups (individuals, wealth-holding entities, or intermediaries acting on behalf of others) in the context of managing their private assets.

• Obligation to maintain accounting records and file an annual balance sheet
• Each year, by July 31, a certified professional must confirm that the SPF complies with specific operating conditions (eligible investor and final withholding tax on certain interest payments)
• The SPF cannot interfere in the management of companies in which it holds an interest

• Exempt income
• Capital gains on disposals
• Final withholding tax
• Liquidation proceeds

• The term “SPF” must appear in the company’s name
• The supervising authority is the Luxembourg registration and estates administration

• Formation Duty: Since January 1, 2009, no formation duty is payable upon establishing an SPF
• Subscription Tax: This tax is 0.25% per year, calculated on the paid-up share capital, share premiums, and the portion of debts exceeding eight times this capital and premiums
• VAT: The SPF is not subject to VAT

Regarding income distribution, the SPF enjoys favorable tax treatment. For example,no withholding tax applies on liquidation bonuses when the company dissolves. In other cases of dividend distribution, EU directives and the Luxembourg law of December 23, 2005, apply, particularly for Luxembourg residents and EU citizens.
Furthermore, the SPF is exempt from several major taxes in Luxembourg, including corporate income tax (IRC), municipal business tax (ICC), and net wealth tax (IF). These exemptions apply without restriction on the direct or indirect ownership rate in other businesses or the holding period for shares.

To benefit from these tax exemptions, the SPF must meet certain conditions: its investors must be eligible, and its shares cannot be offered to the public or listed on the stock exchange. These restrictions ensure that the SPF remains a private tool, primarily intended for managing family or personal wealth.