Holding Company in Luxembourg
Establish a Holding Company in LuxembourgUpdated on Monday 20th November 2023
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|Legal entities used|| |
- private limited liability company,
- public limited liability company,
- tax exempt holding company (SOPARFI),
- limited partnership,
|Usual registration with the Luxembourg Companies Register|
Approx. 3 weeks
|Types of assets owned by the holding|| |
- real estate,
- intellectual property etc.
|Requirment for local bank account (Yes/No)|| |
|Residency requirements for the founder(s)|| |
- tax exemptions,
- easy to register,
- good reputation of Luxembourg,
- access to double tax treaties
Special conditions under the EU Parent-Subsidiary Directive
|Shareholding structure|| |
At least one shareholder
|Minimum capital|| |
- EUR12,400 for private companies,
- EUR31,000 for public companies
21% income tax rate for holdings registered as private and public companies
Full foreign control of the parent company
|Registered agent requirements|| |
No local agent is required, however, such services are available
|Accounting and reporting|| |
Audited financial statements must be filed no later than 6 months from the end of the financial year
|Number of double taxation treaties||Approx. 80|
|Applicable legislation||Commercial Companies Law|
Availability of various types of holding companies (YES/NO)
Types of Luxembourg holding companies
|Documents required for registration|| |
- Articles of Association,
- details of the shareholders,
- details of the director(s),
- proof of registered address,
- bank statement regarding the issuance of the share capital
|Local director required (YES/NO)|| |
No, there is no need to appoint a resident director.
|Management status (natural person/corporate director)|| |
Both natural persons and corporations are accepted.
|Uses of a holding company|| |
- share ownership,
- intellectual property ownership,
- acquisition of various assets,
- controlling other companies
|Access to the EU Parent-Subsidiary Regime (YES/NO)|| |
Yes, as Luxembourg is a member of the European Union.
|Types of shares it can issue|| |
Registered and bearer shares can be issued.
|Requirement to appoint an auditor (YES/NO)||Yes, a holding company must appoint a statutory auditor.|
|Special authorization requirement (YES/NO)|| |
Yes, in the case of financial holdings, approval from the Financial Supervisory Commission is required.
|Access to specialized local workforce (YES/NO)|| |
Yes, Luxembourg offers access to financial professionals.
|Possibility to operate in other countries (YES/NO)|| |
|Requirement to travel to open a holding company (YES/NO)|| |
No, there is no need to travel to Luxembourg to create a holding.
|Holding company registration support (YES/NO)||Yes, our lawyers in Luxembourg offer such a service.|
Forms of the Luxembourg holding company
- A private limited liability company, shortly known as SARL, which is the most popular business form in Luxembourg;
- A public limited liability company, also known as SA, which is suitable for large businesses;
- A partnership limited by shares, also known as SCA, which can be set up by at least two members;
- A co-operative, shortly known as SC, which falls under the prospect of the Luxembourg Civil Code.
Types of holding companies in Luxembourg
Requirements for setting up a holding company in Luxembourg
- the company must have a trading name which must be reserved with the Trade Register,
- various documents must be prepared, among which the Articles of Association are essential,
- the company must also have a share capital which must be demonstrated through a bank statement,
- the company must have at least one director, however, specific provisions apply,
- the holding must also have a legal address in Luxembourg prior to incorporation.
Trading name reservation for a holding company
Registered address requirements for a holding
Holding company management in Luxembourg
Share capital requirements for a holding company in Luxembourg
The uses of a holding company in Luxembourg
- for owning shares in one or more companies;
- for owning intellectual property rights;
- for acquiring an inheritance;
- for e-commerce purposes.
The financial holding company in Luxembourg
Taxation of the holding company in Luxembourg
- the corporate tax at a rate of 21%,
- the contribution to the unemployment fund - 4%,
- the share transcription tax - 0.5%,
- the share registration duty - 0.6%.
Why open a holding company in Luxembourg
- tax advantages if the holding company qualifies for the participation exemption regime,
- access to a large network of double taxation agreements,
- easy incorporation and corporate bank account opening procedures compared to other European jurisdictions,
- professional workforce in the financial field which is the country’s most important economic sector.