Holding company in Luxembourg
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.
Legal forms that can register Holding Company
A Holding can have one of the following legal forms to engage in Luxembourg:
Public Limited Company–SA
The PLC is mainly the legal form of company chosen by large businesses, but it can also be used, as the shares in this type of business can be bearer shares and are therefore more easily transferable.
Private Limited Company–SARL
PLLC is one of the most common types of business structures in Luxembourg.
Partnership Limited by Shares–SCA
A partnership limited by shares is a commercial company. It combines features of a limited partnership with those of a public limited company.
Co–operative–SC
The key features of a cooperative company include its variable capital, a variable number of partners, and the absolute non-transferability of shares to third parties.
Regardless of the type of company, all share capital contributions are paid in cash or kind and the shares can be issued as registered or bearer shares under certain conditions.
Setup a holding company
We will help you to open a holding company in Luxembourg, our specialists have extensive experience and knowledge about holdings companies. With us, the process of opening a holding will be simple and fast.
Holding Company registration procedure
Key stages to incorporate a Holding company in Luxembourg:
Stage 2: Register a company
Register Holding Company by providing a business name, articles of incorporation and the name of the business agent managing the operating and holding company. Registrant can be the agent for both the operating and holding company.
Articles of incorporation outline the purpose of a company, list its officers, and specify the method by which business-related decisions will be made. It is also necessary to create a bank account that is unique and specific to a holding company. Holding companies and the operating must use separate bank accounts and keep track of their bank records separately.
Stage 3: Deposit assets
Investor deposits the wealth that company makes with the holding company, rather than the operating company. This money can then be lent to the operating company if needed. If an operating company is already in existence at the time that holding company started, the entrepreneur can sell the operating company’s assets to the holding company to protect them.
To grow and diversify the portfolio of a holding company, businessman may end up choosing to invest in or gain tangible or intangible equity in other businesses as opportunities arise.
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.
Holding Company Name
Luxembourg holding companies have to select a unique name that is not similar to any existing companies. The company name must also end with the initials “AG” or “SA” to define the particular type of business structure that it is. Also, the company name cannot be like a company shareholder’s name.
Documents
Alongside this information, they must also prepare:
- A profit-and-loss balance sheet;
- An audit reports;
- A list of company directors and auditors;
- A list of shareholders;
- A notice should be published in the Memorial that these documents have been filed with the trade register.
Taxation of the holding company in Luxembourg
The duties a Luxembourg holding company is subject to are:
Tax | % |
Corporate Tax | 21% |
Contribution to the unemployment fund | 4% |
Share transcription tax | 0.5% |
Share registration duty | 0.6% |
Office Address and Local Agent
Luxembourg holding companies are obligated to have a local office and local registered agent to receive process server requests and official notices. The company may have a main address anywhere in the world.
Get started
Establishing a holding company in Luxembourg is not a complex process, however, it is better to talk to a specialist in company formation in Luxembourg and receive comprehensive support. Our team is ready to help local and foreign entrepreneurs to start a business in Luxembourg by handling the entire process and representing their interests.
Consultation about Holding Company
Our team of professionals will help with all the paperwork and will answer questions regarding the Holding Company.
Accountancy
While all Luxembourg companies are required by law to file their financial records, financial statements are not made public and are not subject to annual audit providing the total bank statement is less than 3 million Euro, turnover is fewer than 6 million Euro or that there is one shareholder.
Bank account
Acquire a bank account in Luxembourg, after the successful foundationation of a company.
Consultation
If you feel like you need more information about business registration, contact us a request consultation.
Other types of companies
If you feel like a Holding company does not fit your needs, click the button below and you will see other legal forms like Private Limited Liability Company, Public Limited Company and Branch office.
Holding company registration
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