There are a number of benefits to SOPARFI. Firstly, with regard to tax benefits, there are a number of conditions under which exemptions from taxation can be received. Noteworthy stipulations include the absence of subscription tax and the absence of withholding tax in the liquidation process of SOPARI. Another major benefit is privacy that is available to shareholders in a holding company in Luxembourg since names are not required to be published. It is also easy to register this type of company and registration only requires one shareholder.

SOPARFI stands for Societe de Participations Financieres and refers to financial investment companies. This type of company is one that is required to abide by general legal laws of Luxembourg as well as tax-related company law. In order to form a SOPARFI, the company’s articles of association must be registered by a notary. After this, these articles of association must be published in the Official Bulletin (Memorial C) and applied to Luxembourg’s Trade and Companies Register. This company only requires one individual or legal person of any nationality.

There are three types of legal form that a SOPARFI may take. The most common is a Public Limited Company (PLC., Corp./SA). The other two are a Limited Liability Company (LLC., Ltd/SARL) and a Partnership Limited by Shares (SECA).

The main goal of SOPARFI is investments in companies as well as their management and realization. This type of company is allowed to carry out all types of commercial activities as long as they are not against the Luxembourg legislation. Written consent from the country’s Ministry of Small and Medium-Sized Businesses is required in order to conduct commercial activities as a primary or secondary activity.

There are a number of tax-related advantages particularly associated with a SOPARFI.

Profits from dividends, sale or subsidiary company liquidation is exempt from corporation tax if it satisfies particular conditions with respect to the status of the parent and subsidiary companies, the level of investments and the period of ownership.

SOPARFI benefits from DTAs that Luxembourg has with other countries. That means that these companies are not required to pay taxes to other countries. These companies also have advantages related to the deduction of expenses, net wealth tax and withholding tax. On the other hand, a SOPARFI may be liable to value added tax at the rate of 17% depending on if its business activities include commercial activities.

Financial Holding Basic

  • Statutes and bylaws drafting
  • Notary fees
  • Power of attorney
  • Capital bank account
  • Application for VAT
  • Tax advise
  • Business permit