LUXEMBOURG – A WHOLE WORLD IN A SINGLE PLACE
The Grand Duchy of Luxembourg has significant advantages over other jurisdictions for our clients, as it provides an excellent environment for the administration of international business structures, with legally supervised service providers such as B.A. Trust Group’s entities.
One of the most interesting aspects about Luxembourg as a location is that it conjugates flexibility and an international thinking approach. This worldwide business platform evolves in a EU-conform environment.
Thanks to our internationally oriented and highly qualified professionals, our companies can help you set up and manage the most appropriate corporate entity in Luxembourg.
Political, social and economic stability, the modern legal and regulatory framework and the tax environment have made Luxembourg a leading jurisdiction for corporate holdings, investment funds (a.o. SIF, SICAR) and family wealth management companies over the last few decades.
The continuously growing financial sector, new sectors like Intelligent communication technology and logistics prove that the government does its utmost to maintain and even increase the attractiveness for those who do business in Luxembourg. The main strengths of Luxembourg are, on the side favorable rules with a long-term planning security, and on the other side a unique people network, connected to the whole world. The highly skilled, multi-lingual workforce constitutes a valuable resource for corporate functions, including finance and accounting.
Below are listed the most important Luxembourg corporate entities and the areas of their use :
The SPF only pays a rather small tax on its paid-up share capital (and assimilated amounts). The tax basis is increased in the presence of excessive debt financing.
For investors which live in a jurisdiction which does not assess taxes on the income of the SPF irrespective of the distribution thereof, the SPF can serve as asset-pooling entity for several purposes (e.g. succession planning).
The Securitization Vehicle is fully taxable, but is allowed to deduct all payments (and future payments) on the securities issues from its taxable income, generally resulting in a negligible tax charge of the company itself.
All payments (dividends, interest or liquidation proceeds) in respect of securities issued for a securitization operation are exempt from Luxembourg withholding taxes. However, payments qualifying as “interest” to residents within the EU fall within the scope of the EU Savings Directive.
The scope of legal forms which can taken is larger than for publicly offered investment funds and includes the normal corporate forms as defined in Luxembourg commercial law.
Like in a SICAR, investors need to comply with certain conditions.
The SIF is exempt from income and wealth tax. There is no Luxembourg withholding tax levied on distributions. However, payments qualifying as “interest” to residents within the EU may fall within the scope of the EU Savings Directive.
The SIF only pays a rather small tax on its net asset value.