Luxembourg has been traditionally known for the much favourable regime of the 1929 holding companies which will come to an end on December 31, 2009.  Early in the nineties, Luxembourg has implemented a liberal regime of the EU directive on parent-subsidiaries known under the name Société de Participations or Soparfi.  This fully-taxable holding company, but which benefits from specific tax exemption on dividends and capital gains, is the most appropriate legal vehicle for the holding and management of participations in one or several companies. In addition to the holding and management of shareholdings, the Soparfi may also have connected activities such as the provision of various administration and management services to the group. It is not restricted to any specific type of investment.  Financial management activities can nowadays be also coupled with the management of Intellectual property rights at group level.  Luxembourg has adopted an attractive tax regime for companies owning and developing intellectual property rights which can allow corporation to exempt up to 80% of their IP derived income.

Because it is easily and quickly set-up, a Soparfi is also widely used for private equity or real estate investments. SOPARFI benefits from all the EU directives on interest, royalties and dividends and the Merger Directive.  It can also benefit from the wide network of Luxembourg double tax treaties.

For more information on the Soparfi, consult our data sheet in our Resources section.