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Corporate Structure

The most effective corporate structure in Luxembourg is Holding Company.

Holding Company

Holding Company as a company that holds shares of different national or international companies, is created primarily for financial advantages. Holding Company does not produce goods or services itself. Rather, its purpose is to own shares of other companies to form a corporate structure. Holding companies allow the reduction of risk for owners and can allow the ownership and control of a number of different national or international companies.

There are two types of Holding Companies in Luxembourg: SOPARFI for corporations and  SPF for private individuals.

SOPARFI (Société de Participations Financières)

SOPARFI is fully taxable Luxembourg resident company that takes advantage of participation exemption in Luxembourg.

The participation exemption provides SOPARFI a 100% exemption from the following:

  • Income tax exemption on dividends, divestment gains and liquidation proceeds received by Luxembourg companies. There is no withholding tax on liquidation proceeds.
  • Withholding tax exemption on dividends paid by Luxembourg companies to their shareholders.
  • Wealth tax exemption on the shareholding interest held by a Luxembourg company in its subsidiaries.

S.à r.l. designated as SOPARFI (Société de Participations Financières) is the most suitable legal entity to control your offshore activities.