Holding company, SPF or direct holding: which structure in Luxembourg

Published on 10 October 2026 · Updated on 10 October 2026

In short

To set up a holding company in Luxembourg, an investor compares three routes: the SOPARFI, a taxable commercial company that holds shareholdings and may carry on an activity; the SPF, reserved for managing private financial wealth; or direct holding, with no company. The choice depends on the investor, the activities and the expected income.

Three ways to hold shareholdings

SOPARFI: financial holding company: an ordinary, taxable company that acquires, holds and manages shareholdings and may also carry on a commercial activity. It is not a legal form but the working name of a SARL, SA or SCA playing that role.
SPF: family wealth management company: a company under the law of 11 May 2007 whose exclusive purpose is acquiring, holding, managing and realising financial assets for private investors, with no commercial activity.
Direct holding: the investor holds the securities in their own name, with no company in between. Nothing is formed; the income falls within the investor’s own tax situation.

SOPARFI, SPF or direct holding: the comparison

This table describes general rules. It does not say what applies to your situation.

Criterion	SOPARFI	SPF	Direct holding
Who can hold	Any individual or company	Eligible private investors: individuals managing their private wealth, wealth entities acting for them, intermediaries acting on their behalf	The investor themselves, an individual or a company
Forms	SARL, SA, SCA, among others	SARL, SA, SCA or cooperative organised as an SA	No company
Permitted activities	Holding of shareholdings; services to subsidiaries, financing and commercial activity possible if the corporate purpose provides for it and the business permit requires it	Acquire, hold, manage and realise financial assets. Excluded: commercial activity, interfering in the management of held companies, remunerated loans, directly held real estate	Depends on the investor’s situation
Corporate tax	Taxable under ordinary law (corporate income tax, municipal business tax). Income from qualifying shareholdings exempt under conditions	Own tax regime: exemption under conditions from income tax, municipal business tax and net wealth tax	No company: the income is the investor’s own
Withholding on dividends paid out	15 % in principle, no withholding towards a parent company that meets the parent-subsidiary conditions	No withholding on distributed dividends; they remain taxable for resident recipients	15 % on dividends from a held Luxembourg company, or a reduced tax treaty rate
Parent-subsidiary directive	Parent-subsidiary regime available if the conditions are met	Excluded from the benefit of the directive	Not applicable
Annual subscription tax	Not applicable to the SOPARFI	0.25 % of the base, minimum EUR 1,000 and maximum EUR 125,000 per year	Not applicable
Business permit	Only if it carries on an activity that requires one	No, no commercial activity	Not applicable
Governance and substance	Managers (SARL) or board of directors (SA), real registered office, accounts kept. Substance is analysed with a tax adviser	Management within the limits of the law, SPF mention in the name, annual certification filed electronically with the AED	No structure to govern

Sources: Guichet.lu, Direct Tax Administration, AED circular no. 823. Rates and thresholds may change: check them before any decision.

Official benchmarks

Dividends, parent-subsidiary regime: Holding of at least 10 % of the capital or an acquisition price of at least EUR 1.2 million, for 12 months
Capital gains on disposal: At least 10 % of the capital or an acquisition price of at least EUR 6 million
Withholding on dividends: 15 % in principle
SPF subscription tax: 0.25 %, minimum EUR 1,000 (since 1 January 2025), maximum EUR 125,000
Overall rate, Luxembourg City: 23.87 % for 2025 and 2026 according to the Direct Tax Administration (16 % corporate income tax, employment fund, municipal business tax)

Use cases: what each vehicle allows

Use case	SOPARFI	SPF
Acquiring subsidiaries	Vehicle for acquiring and holding shareholdings, within the limits of the corporate purpose	May hold shareholdings provided it does not interfere in the management of the held companies
Holding shareholdings	The core role of a SOPARFI; income from qualifying shareholdings exempt under conditions	Holding of financial assets, including securities, with no commercial activity
Intragroup financing	Ordinary company: no prohibition specific to the regime; interest deductibility rules to be checked	No remunerated loans, even to held companies; only an ancillary, free-of-charge advance or a guarantee
Distributions	15 % withholding in principle; exemption towards a qualifying parent company	No withholding on dividends; taxation at the level of resident recipients
Disposal of shareholdings	Capital gains exempt from corporate income tax if the 10 % or EUR 6 million threshold is met, with exceptions for charges previously deducted	Realisation of financial assets is within its purpose; tax regime to be validated with an adviser
Governance and substance	Bodies of the SARL or SA, real registered office address; substance to be analysed case by case	AED control, fines for breaches, possible withdrawal of the status

Worked examples, with their assumptions

These examples apply the official rules to fictional amounts. They are neither an estimate nor tax advice.

Example	Assumptions	Result
SPF subscription tax, small capital	Paid-up capital of EUR 100,000, with no share premium and no debt above eight times the paid-up capital	0.25 % gives EUR 250, so the annual minimum of EUR 1,000 applies
SPF subscription tax, medium capital	Paid-up capital of EUR 1,000,000, same assumptions	0.25 % gives EUR 2,500 a year
SPF subscription tax, cap	Paid-up capital of EUR 60,000,000, same assumptions	0.25 % gives EUR 150,000, reduced to the maximum of EUR 125,000 a year
Withholding on a dividend	Dividend of EUR 100,000 paid by a Luxembourg company to a non-resident shareholder, with no applicable treaty or exemption	15 % withholding, i.e. EUR 15,000
Withholding towards a parent company	Same dividend, recipient a capital company holding at least 10 % of the capital or having paid at least EUR 1.2 million, for 12 months	No withholding, but the exempt amount is declared (form 900) within 8 days

Excluded from these calculations: fees, VAT, registration duties, the recipient’s own taxes, reduced treaty rates, anti-abuse rules.

From choosing the structure to forming it

1
Frame the profile
Who invests, in what, with what expected income and what activity. We ask these questions to point towards the right vehicle.
businessregistration.lu
2
Validate the tax structure
Choice between SOPARFI, SPF and direct holding, substance, tax treaties. This work belongs to the tax adviser.
Tax adviser
3
Form the company
Legal scoping, KYC, account and capital, articles drafted by the partner lawyer, deed executed before a notary.
businessregistration.lu, lawyer, notary, bank
4
RCS, RESA, RBE
Registration, publication and declaration of beneficial owners.
LBR
5
Ongoing follow-up
Bookkeeping entrusted to an independent licensed accountant; for an SPF, returns and annual certification with the AED.
Licensed accountant, AED

The limits to know before choosing

A holding company is not chosen on a table of rates alone. The parent-subsidiary regime requires conditions on the holding and on the companies concerned. It comes with anti-abuse rules: according to the Government, Luxembourg has applied a general anti-abuse rule aimed at artificial arrangements since 2019, and a specific anti-abuse clause for the parent-subsidiary regime has existed since the law of 18 December 2015. The SPF is excluded from the benefit of the parent-subsidiary directive.

The Government also points to the limitation of interest deductibility to 30 % of EBITDA, stemming from the law of 21 December 2018. Tax treaties, which can reduce withholding, depend on the country of the investor and of the held company. These points are handled in a separate tax analysis document, with a tax adviser.

What we do and do not do

Business Registration points you in the right direction, forms the company and coordinates lawyer, notary, bank and filings. We do not give personalised tax advice and do not analyse an investor’s transaction. For a direct holding there is nothing to form: we have no service to offer.

Which Business Registration service applies

For a SOPARFI, formation is offered as a SARL from EUR 2,999 excl. VAT and as an SA from EUR 3,999 excl. VAT, excluding notary, LBR and bank costs, which are re-invoiced at cost. See set up a SOPARFI. For an SPF, the offer is a written quote: see set up an SPF. The detailed comparison is in SOPARFI vs SPF, and the registered office in domiciliation.

Next step

Set up your holding company

Structure validated with your tax adviser; we handle the formation. Written quote.

Start my project

Frequently asked questions

How do you set up a holding company in Luxembourg?

Most often you form a SOPARFI, that is an ordinary SARL or SA whose purpose is to hold shareholdings: articles drafted by a lawyer, notarial deed, registration with the RCS and declaration to the RBE. The structure is first validated with a tax adviser.

What is the difference between a SOPARFI and an SPF?

A SOPARFI is a taxable commercial company, open to any shareholder, which may also carry on an activity. An SPF is reserved for private investors, is limited to financial assets, cannot lend for remuneration or hold real estate directly, and pays an annual subscription tax.

How much is the subscription tax of an SPF?

It is 0.25 % of the base, with an annual minimum of EUR 1,000 since 1 January 2025 and a maximum of EUR 125,000. The base is the paid-up capital, plus share premiums and the part of debts exceeding eight times the paid-up capital and premiums.

Does a Luxembourg holding company pay withholding tax on dividends?

In principle 15 % on the dividends it distributes, or a reduced tax treaty rate. Withholding is removed towards a parent company holding at least 10 % of the capital, or a holding that cost at least EUR 1.2 million, for 12 months. An SPF withholds nothing.

Can you hold shareholdings without forming a company?

Yes, through direct holding: the investor holds the securities in their own name and nothing is formed. The income then falls within their own tax situation. Whether a company in between is worthwhile depends on the profile and the transaction, and is validated with a tax adviser.

Does Business Registration give tax advice on choosing the holding?

No. We point you in the right direction on general criteria, form the company and coordinate lawyer, notary, bank and filings. The tax analysis of your case, substance, treaties and anti-abuse rules belong to a tax adviser, who acts before formation in a document separate from our formation file.