Soparfi HOLDING in Luxembourg

A Soparfi is a very tax efficient type of holding company in Luxembourg.

As holding company, it has a specific corporate object and a specific taxation, for instance on dividends collected.

It can be a limited holding company.

 

Soparfi means “SOciété de PArticipations FInancières”.

 

WHAT A SOPARFI CAN DO

  • Hold its subsidiaries' shares and collect dividends

  • Own real estate properties and receive rents or capital gains

  • Manage its own financial assets such as bonds, quoted shares, etc.

  • Hold Intellectual Property and receive royalties

  • Be a corporate director

SOPARFI HOLDING TAX SYSTEM

 

The Soparfi is not a tax exempt holding company. The income tax system and the income tax rates applicable are linked to the type of corporate income.

 

The tax system applicable to a Soparfi holding is the following :

  • the income tax rate on the dividends collected by the subsidiaries is 0%

  • the income tax rate on liquidating dividends is 0%

  • the income tax rate on capital gains from subsidiary share transfer is 0%

  • Soparfi companies are covered by the parent-subsidiary European Directive n° 90/435/EEC dated 23707/1990, so there is no tax on dividends distributed by the UE subsidiaries.

  • A withholding tax of 15% is applicable on Soparfi dividends distributed to its shareholder (Individual or non UE corporate shareholder or corporate shareholder located in a jurisdiction which hasn't signed a non-double taxation agreement with Luxembourg).

  • Incomes from real estate or intellectual property are taxed on the basis of their nature, and not within the specific framework of the Soparfi.:

NB : Real estate incomes are taxed in the country where the real estate is located and according to the applicable rate.

NB 2 : The Soparfi tax exemption is a real 0% income tax rate and not an income tax refund system.

 

VAT & TRADING ACTIVITIES IN A SOPARFI HOLDING

 

This type of holding company can neither have any kind of trading activity nor obtain an intra-community VAT number.

 

ADDITIONAL ACTIVITIES OF A SOPARFI

A Soparfi company can perform additional limited activities such as services providing to its subsidiaries. In this case, a VAT liability and business license are required.

 

CORPORATE STATUS OF A SOPARFI HOLDING

This holding company is a tax status and not a legal status so it can be a PLC (SA) or a LTD (SARL) for example.

 

SOPARFI HOLDING BOOKKEEPING

Like any other European company, the SOPARFI shall fulfil legal requirements, such as bookkeeping, balance sheets, tax returns (IRC+ICC), etc.

 

SOPARFI HOLDING STAFF RECRUITING

Due to the nature of its activity, this type of holding company generally has no staff, nevertheless staff recruiting is not excluded for specific corporate activities.

 

In this case, community provisions related to social insurances are applicable, it means the staff has to perform his activity in the country of the company’s location (specifically, the Grand Duchy of Luxembourg) in order to benefit from the social regulations of the employer’s country.

 

As a logical consequence, a company employing staff under Luxembourg status shall have its own premises and not have a registered address.

 

OFFSHORE / ONSHORE COMPANY

Luxembourg is not an offshore juridiction, it is part of the European Union and the Euro-zone. So Luxembourg companies are not offshore companies.

Business incorporation in Luxembourg does not mean offshore company formation or registration.

 

FMV FOR SOPARFI HOLDING COMPANIES

As we are certified public accountants and tax consultants, we take in charge all the administrative, tax and accounting tasks, from the company formation to the yearly balance sheets.

To have a quick start up, we propose Soparfi shelf companies (ready-made companies)