Unlike SOPARFIs, family wealth management companies (SPFs) are governed by the law of 11 May 2007 and are not covered by common law. Some of the features of wealth planning include:
- Family wealth management companies’ actives are strictly regulated and are limited to holding financial assets. All commercial activity is prohibited.
- Family wealth management companies are exempt from corporation tax and pay a 0.25% subscription tax based on paid-up share capital plus share premium plus any portion of debt that exceeds the amount of the paid-up capital and share premium by eight times.
- Family wealth management companies are excluded from most tax treaties signed by the Grand Duchy of Luxembourg.
- Dividend distributions are exempt from any Luxembourgish withholding tax.
- No Luxembourgish tax applies to capital gains from sale and distributions from net liquidation proceeds.
- Family wealth management company associates must be natural persons or legal entities acting on their behalf.