SPF

SOCIETE DE GESTION DE PATRIMOINE FAMILIAL

1. Introduction
Luxembourg’s Luxembourg has long been a leader in private wealth management.
The SPF (Société de Gestion de Patrimoine Familial) is a specialized, tax-efficient structure designed exclusively for the management of private assets. It offers individuals and families a simple, regulated framework to hold and manage their investments securely.

2. Legal Definition & Framework
The SPF was created by the Law of 11 May 2007 to replace the former 1929 holding company regime, aligning with European requirements. Key features include: 
    • Designed solely for private wealth management. 
    • Reserved for individual investors or private asset-holding structures (e.g., family offices, trusts, foundations).
It cannot conduct commercial activities or offer investment management services to the public.

3. Purpose & Typical Use Cases
Hold and manage equity interests in subsidiaries and other companies.The SPF is intended to:
     • Hold financial assets (shares, bonds, cash, investment funds, etc.) for private individuals or families. 
   •Provide a transparent and tax-efficient solution for asset protection and succession planning.
Centralize family wealth under a controlled and regulated entity.

4. Main Features 
Legal form: generally a S.A. (Société Anonyme) or a S.à r.l. (Limited Liability Company). (Société à Responsabilité Limitée). 
Taxation: Exempt from corporate income tax, municipal business tax, and net wealth tax but subject to a 0.25% subscription tax (minimum EUR 100, maximum EUR 125,000 annually) based on the value of its assets. 

Eligible Investors: Only private individuals or their estate planning vehicles (trusts, foundations, etc.).
Prohibited Activities: No commercial activities allowed and Cannot hold real estate directly.

5. Advantages 
Access to Luxembourg’s Double Tax Treaty Network and EU Directives. 
Participation Exemption: Dividends and capital gains can be exempt if conditions are met. (Hold a stake of at least 10% for at least 12 months).
Flexible Structuring: No specific restriction on activities apart from regulated sectors. 
Credibility: Recognized and respected internationally for holding structures.

6. Limitations or Considerations 
Investor Restrictions: Not available to institutional or professional investors. 
Strict Activity Limits: Commercial activities are prohibited, requiring careful asset management.
No Tax Treaty Benefits: SPFs cannot benefit from Luxembourg’s double taxation treaties or EU Parent-Subsidiary Directive, as they are exempt from taxes.Reporting
Obligations: Although simple, annual accounts must still be filed and quarter subscription tax declared.

7. Conclusion 
The SPF is an excellent solution for individuals and families seeking a confidential, tax-efficient, and secure way to manage private wealth. Its simplicity, combined with Luxembourg’s legal stability, makes it a highly attractive option for wealth structuring and estate planning.

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