There are many instances wherein an individual can benefit from organizing a crucial portion of their patrimony in a structure with a unique legal personality. This includes succession planning, asset protection, wealth preservation, and the organization of management powers within a family office, as well as speculative operations and borrowing. 

Family Wealth Management Companies may be established in the following legal forms:

• Public limited liability company (SA)
• Private limited liability company (SARL)
• Partnership limited by shares (SCA)
• Cooperative organized under the form of the public limited company (SCOP)

Taxation for Family Wealth Management companies

• The Family Wealth Managementt (SPF) company is exempt from income tax and net wealth tax.
• There is no withholding tax that applies to interest payments except for interest paid to Luxembourg tax resident individuals and individuals who fall under the European Savings Directive.
• Dividend distributions and liquidation proceeds are not assessed with withholding tax. 
• Family Wealth Management cannot benefit from double tax treaties contracted by Luxembourg with other countries or from the European Parent-Subsidiary Directive (90/435/CEE of 23 July 1990)

Family Wealth Management Shareholding Eligibility

The Family Wealth Management structure is limited to the following types of investors:

• Individuals who function within the scope of management of their private wealth.
• Entities that function solely in the interests of private wealth of one or more individuals. 
• Intermediaries acting on behalf of investors mentioned above. 

Interested investors must confirm in writing to the Domiciliation Agent, or failing that, to the Directors of a Family Wealth Management Company, that it is indeed an eligible investor. 

Shareholders of a Family Wealth Management Company (SPF) must be limited to a group of investors. Shares issued by a Family Wealth Management Company (SPF) cannot be listed on any stock exchange nor can be constituted as public offering. 

The professional acting on behalf of the Family Wealth Management Company (SPF), such as in the case of a domiciliary agent, authorized auditor, or chartered accountant, must be certified on an annual basis that the Family Wealth Management Company (SPF) complies within the conditions enacted in law. 

Capital Distribution Duty 

As of 1 January 2009, the 0.5% capital contribution duty was abolished and replaced by a fixed registration fee of EU 75. 

Liabilities 

A Family Wealth Management Company (SPF) may be financed by debt from bank loans, shareholder loans, and private bond issues within a ratio amounting to eight times its share capital enhanced by share premiums. 

Subscription Tax

The Family Wealth Management Company (SPF) is assessed with an annual subscription tax rate of 0.25% calculated on the subscribed and paid up share capital. 

Subscription tax can be no less than EUR 100 and exceed EUR 125,000, applicable to capital only and not to debt except in case the debt is more than eight times of the capital. 

Allowed Activities

Portfolio management of transferrable securities, such as in the case of shares and investment company in variable capital. Participation acquisitions in other companies limited by shares provided that the Family Wealth Management Company (SPF) does not intervene in the management of the latter. 

Restricted Activities 

• Commercial and industrial activities
• Purchase or direct ownership of real estate
• Holding intellectual property 
• Granting of interest-bearing loans
• Engagement in the management of participations

Applications

• Succession planning
• Family wealth management vehicle

As an international consulting firm, Damalion specializes in providing services for individuals and family offices, as well as the incorporation and management of Luxembourg family wealth management companies with bank account opening. Our global service network consists of long-standing relationships with various professionals in the legal field, accountancy, fiscal, and regulatory sectors. Reach out to a Damalion expert today to learn more.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Luxembourg vehicle for managing family wealth (SPF) — purpose, eligibility, legal forms, taxation, allowed and restricted activities, and 2025 compliance points

For private individuals, families, family offices and their advisers • This page explains how the SPF works in simple terms. Decisions by authorities, banks and professionals remain their own.

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What is an SPF in Luxembourg?

The SPF is a family wealth management company used to hold and manage private financial assets. It is designed for private investors and family structures. It does not carry out commercial activities. The legal basis is the law of 11 May 2007 on family wealth management companies, as amended.

Who can use it?

• Individuals managing their own private wealth.
• Entities acting solely in the interest of the private wealth of one or more individuals (for example, a family office vehicle).
• Intermediaries acting on behalf of the above investors.

Each investor confirms in writing that they are eligible. Shares are held by a private group of investors. No public offering and no stock exchange listing.

Legal forms you can choose

Form	Notes
SA (public limited company)	Flexible share capital; board structure.
Sàrl (private limited company)	Common for closely held structures.
SCA (partnership limited by shares)	General partner + shareholders.
SCOP (cooperative in the form of an SA)	Less common; specific governance.

What the SPF may hold and do

• Hold and manage transferable securities and financial instruments (shares, bonds, funds, notes, listed and unlisted instruments).
• Hold participations in companies without intervening in their management.
• Keep multi-currency accounts and standard custody accounts with financial institutions.

What the SPF cannot do

• No commercial or industrial activity.
• No direct real estate ownership (it may hold shares in entities that own real estate).
• No intellectual property holding.
• No interest-bearing lending as a business. Ancillary, non-remunerated cash advances or guarantees related to its participations are possible under strict limits.
• No management role in its participations.

Tax and fees at a glance 

Item	Position	Notes
Corporate income tax / municipal business tax	Not applicable	SPF is exempt from income taxes.
Net wealth tax	Not applicable	Exempt.
Withholding tax on dividends and liquidation proceeds	Not applicable	None under the SPF law.
Withholding on interest	Not applicable, with exceptions	Separate rules may apply to interest paid to certain Luxembourg tax resident individuals.
Subscription tax (taxe d’abonnement)	0.25% per year	Base: paid-up capital + share premium + portion of debts exceeding 8× paid-up capital and share premium. Minimum EUR 1,000; maximum EUR 125,000. Debts are measured on the first day of the financial year (or incorporation year for the first year). Declared and paid quarterly.
Registration at incorporation	EUR 75 fixed fee	Capital duty abolished since 1 January 2009.
Double tax treaties / EU directives	Not available	SPF does not access Luxembourg tax treaties or the Parent-Subsidiary Directive.

Governance and 2025 compliance points

• Corporate name: the company’s name must include “société de gestion de patrimoine familial” or “SPF”.
• Annual certificate: must be filed electronically by an authorised professional confirming compliance with SPF rules.
• AED powers and fines: administrative fines up to EUR 10,000 for late filings, non-payment or missing name mention; up to EUR 250,000 for serious breaches (non-qualifying investors, commercial activity, management interference, direct real estate). Persistent breaches may lead to withdrawal of SPF status after a remediation period (up to six months).
• Post-withdrawal use of “SPF”: prohibited after one month; monthly fines can apply if used after withdrawal.
• Debt use: permitted within limits; the 8× ratio impacts the subscription tax base.
• Standard company law rules apply to the chosen form (SA, Sàrl, SCA, SCOP). KYC/AML applies for banking and service relationships.

Common uses

• Long-term family wealth holding and preservation.
• Succession planning and orderly ownership.
• Portfolio management of financial assets through a clean, private company.

How it works

1. Choose the legal form. Match share capital, governance and transfer rules to your needs.
2. Draft simple documents. Articles, shareholder register and eligibility confirmations.
3. Open bank and custody accounts. Explain asset types and expected activity in clear terms.
4. Maintain records. Keep one consistent trail for source of funds and transactions.
5. Review annually. Obtain the yearly compliance certificate and keep registers up to date.

Related reading

• How to incorporate your Luxembourg SPF
• Understanding the Luxembourg SPF
• Contributing shares to a Luxembourg SPF (2025)
• Using a SOPARFI for private equity

We support entrepreneurs, investors and family offices with compliant incorporation, banking coordination and legal/tax alignment.

Frequently asked questions 

1) Is the SPF regulated by the financial supervisor?

No. The SPF is an unregulated company under the law of 11 May 2007. It does not require a financial licence. General company law applies to its chosen form.

2) Who may hold shares in an SPF?

Private investors and structures acting solely for private wealth. Intermediaries may hold on behalf of such investors. Public offerings and listings are not allowed.

3) Which assets may an SPF hold?

Transferable securities and financial instruments, and participations without management control. Direct real estate, intellectual property and commercial assets are excluded.

4) Can the SPF grant loans?

It cannot conduct interest-bearing lending as a business. Ancillary, non-remunerated support linked to its participations may be possible within strict limits.

5) What taxes apply to the SPF?

No corporate income tax, no municipal business tax and no net wealth tax. The SPF pays an annual subscription tax at 0.25% with a minimum of EUR 1,000 and a maximum of EUR 125,000.

6) Are distributions from the SPF subject to withholding tax?

Dividends and liquidation proceeds are not subject to Luxembourg withholding tax under the SPF regime. Separate rules may apply to interest paid to certain resident individuals.

7) Does the SPF access tax treaties or EU directives?

No. The SPF does not benefit from Luxembourg double tax treaties or the EU Parent-Subsidiary Directive.

8) What leverage limits apply?

For subscription tax purposes, debt exceeding eight times paid-up capital plus share premium increases the tax base. Debts are measured on the first day of the financial year.

9) What annual compliance is required?

An authorised professional must file the annual certificate electronically, confirming compliance with investor eligibility and activity limits.

10) Are there 2025 changes to corporate naming?

Yes. The company name must include “société de gestion de patrimoine familial” or “SPF”.

11) What are the AED fines in 2025?

Up to EUR 10,000 for administrative breaches (missing name, late/omitted returns or payments, missing annual certificate). Up to EUR 250,000 for serious breaches (non-qualifying investors, commercial activity, management interference, direct real estate).

12) Can SPF status be withdrawn?

Yes. After a remediation period (up to six months) if serious non-compliance persists. Withdrawal triggers ordinary tax treatment; use of “SPF” becomes prohibited after one month.

13) How often is subscription tax filed and paid?

Quarterly. The tax base and payments follow the AED timelines.

14) Is there a minimum capital?

Minimums follow the chosen legal form (SA, Sàrl, SCA, SCOP). The SPF law does not impose a special higher minimum.

15) Can corporate entities be shareholders?

Yes, if they act solely in the interest of private wealth of one or more individuals, or as intermediaries for eligible investors.

16) Are management fees deductible?

Income taxes do not apply at SPF level. For subscription tax, the focus is on the defined base; ordinary operating costs follow accounting rules.

17) Does the SPF file for treaty relief abroad?

No. Treaty claims are not available to the SPF.

18) What about the UBO register?

UBO data is maintained under Luxembourg rules. Access follows EU and Luxembourg court decisions and legal updates.

19) Can an SPF migrate or convert?

Possible using company-law tools (merger, conversion) subject to conditions. Obtain professional advice before changes.

20) What documents should be kept on file?

Articles, shareholder and UBO registers, eligibility confirmations, annual certificate, accounts, KYC and transaction support, and evidence for subscription tax base and quarterly filings.