Luxembourg has signed with 75 countries for double taxation treaties, which makes setting up a holding company very attractive and allows a tax efficient business arrangement. The country has treaties with all EU member states and with OECD (Organisation for Co-operation and Development–has 34 member countries) members, and the network of double taxation treaties continues to grow with 19 other countries in the list. Holding company might qualify for the participation exemption regime, so dividends received and capital gains coming from the nominal paid-up capital of a subsidiary are completely exempt from Corporate Income Tax (CIT).

Purpose of holding companies

The purpose of holding companies in Luxembourg applies to the management of the stockholdings in other businesses that have economic activities. When having at least 10% of the shares in the company, the holder can vote in the firm and also provide technical management, if it is the case and if the firm approve the agreement.

Holding Company registration requirements

According to law, the SOPARFI must have an office in Luxembourg, maintain accounting records, and submit annual accounts. The creation and administration of SOPARFI are not that difficult, in comparison with other EU countries. If a company is created in the form of a joint-stock company (Soci’et’e Anonyme), it must have at least two investors and three directors, but it is not necessary to hire a local manager. The minimum share capital is 31 thousand euros, of which 25% must be paid already. Shares can be issued to the bearer. There is only one requirement for a name in Luxembourg for offshore companies: it must end with the prefix Ltd, Limited, Corporation, Corp., Incorporated, Inc, etc. As a rule, the opening of a holding company takes about two weeks.



A holding company in Luxembourg has significant benefits as all other non-resident companies in this jurisdiction are subject to corporate taxes, which can reach 40%. The same requirements apply to non-residents of Luxembourg as to residents. The state is very loyal to foreign entrepreneurs. Opening a holding company in Luxembourg, subject to all conditions, and the availability of all documents is not a problem. Holding Companies differ from corporations with fewer formalities. The Luxembourg Trade and Companies Register regulate holding companies. Anybody from all around the world may register a holding company in Luxembourg.

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