What is the the Family Wealth Management Company (SPF) ?
Established by the law of 11 May 2007 (as amended, including by the law of 20 December 2024), the SPF provides a legal framework for structuring personal assets. It is a non regulated vehicle that allows flexible and tailored management of assets.
Legal framework and incorporation
The SPF must obligatorily take the form of a capital company. The permitted legal forms include the Private Limited Liability Company (S.à r.l.), the Public Limited Company (SA), the Partnership Limited by Shares (SCA), or the Cooperative Company organized as an SA. The articles of association must explicitly state that the company is subject to the SPF Law. The SPF is also subject to the 1915 law on commercial companies.
To ensure transparency, the corporate name must include the words “société de gestion de patrimoine familial” or “SPF”. Its creation is carried out by notarial deed in Luxembourg and does not require any specific license.
Corporate purpose and activities
The The corporate purpose of the SPF is strictly limited to the acquisition, holding, management, and disposal of financial assets. It is expressly prohibited from engaging in any commercial or industrial activity.
Permitted activitiesThe SPF may hold or acquire any type of financial instruments, such as shares, bonds, other securities equivalent to shares, interests in companies or collective investment undertakings (OPC), derivative instruments, cash, and assets held in bank accounts. It is authorised to carry out financing activities through the issuance of bonds. The SPF may also grant advances or guarantees to companies in which it holds a participation, provided these are interest free and ancillary.
Prohibited activities
The SPF may not interfere in the management of its subsidiaries. It may not grant interest bearing loans, even to its subsidiaries. It is explicitly prohibited from directly acquiring real estate. Indirect holding is possible, but since 1 July 2021 it may not hold interests in companies (such as SCI or SNC) that themselves hold real estate. The securities it issues may not be offered to the public or listed on a stock exchange.
Eligible investors
Shareholding is restricted to a limited circle of investors. Only the following categories are authorised to hold shares:
- Natural persons acting in the context of managing their private wealth.
Intermediaries acting on behalf of eligible investors.
It is not necessary for shareholders to be related to one another by family ties. Each investor must provide a written declaration confirming their eligibility.
Tax regime
The SPF benefits from a very favorable tax regime and is exempt from corporate income tax (IRC), municipal business tax (ICC), and net wealth tax (IF). It is also not subject to VAT due to its corporate purpose.The SPF is subject only to an annual subscription tax at a rate of 0.25 percent. The minimum amount of this tax is 1,000 euros per year (since 1 January 2025) and it is capped at 125,000 euros per year.
The tax base is calculated on the amount of its paid up share capital (increased by share premiums) plus the portion of debt that exceeds eight times (8x) the amount of paid up share capital and share premiums.