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The SOPARFI constitution in Luxembourg

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The SOPARFI constitution in Luxembourg


The société à participations financières does not legally take any particular corporate form.

It is incorporated in the form of an SA or SARL, or in any other form of capital company.

The purpose of the company may be simply to hold equity interests in other companies, but also to manage licenses and patents, and to manage bond loans granted to subsidiary companies.

Unlike the HOLDING company (Law 1929) or the Société de Patrimoine Familial (SPF), it is authorized to carry on a commercial activity.

Tax treatment


Dividends received by the SOPARFI from holdings in resident or non-resident companies are exempt from withholding tax under certain conditions.

The SOPARFI holds at least 10% of the capital of the subsidiary, or a minimum value of 1.2 million euros.

The subsidiary is a resident or foreign company located in a European Union country.

The SOPARFI must hold the shareholding for a period of 12 months, or undertake to hold it for the same period.

Dividends paid by the SOPARFI to a parent company


Dividends paid to a parent company are exempt from withholding tax if the parent company is a fully taxable resident company or is located in a country with which the Grand Duchy has concluded a double taxation treaty (see international treaty).

Capital gains on the sale of shareholdings in subsidiaries meeting the above conditions are exempt if the SOPARFI holds at least 15% of the capital.

The liquidation bonus paid to shareholders or associates of the SOPARFI following its dissolution or liquidation is exempt.

Similarly, liquidation surpluses paid to the SOPARFI on the liquidation of a subsidiary are not subject to tax.

Other activities


Any activities related to the holding of equity interests, particularly commercial activities, are subject to corporate income tax and VAT.