Brazilian companies are increasingly looking to expand their businesses globally, and Europe is becoming a popular destination. This growth has been fueled by the growing economic ties between Brazil and Europe and the numerous benefits that come with establishing a company in Europe. One popular structure for Brazilian firms seeking to do business in Europe is the Luxembourg SOPARFI. In this article, we will discuss the process of setting up a SOPARFI in Luxembourg and the advantages it offers Brazilian companies.
Economic Ties Between Brazil and Europe
The economic links between Brazil and Europe are strong and growing. Brazil is the EU’s second-largest trading partner in South America, and the EU is Brazil‘s largest trading partner. In 2019, the total trade between the two amounted to €61 billion. This trade is expected to continue growing in the coming years, making Europe an attractive destination for Brazilian firms looking to expand their business.
Tax Regime for SOPARFI Dividends
One of the key advantages of establishing a SOPARFI in Luxembourg is the favorable tax regime for dividends distributed to a holding company. In Luxembourg, dividends received by a holding company are tax-free. This means that Brazilian companies can benefit from lower tax rates on their profits and reduced double taxation.
Double Tax Treaty between Brazil and Luxembourg
Another advantage of setting up a SOPARFI in Luxembourg is the double tax treaty between Brazil and Luxembourg. The treaty provides for the elimination of double taxation, ensuring that Brazilian companies do not face double taxation on their profits. The treaty also provides for a lower withholding tax rate on dividends, interest, and royalties, further reducing the tax burden on Brazilian companies.
Advantages of Setting Up a SOPARFI in Luxembourg
There are several advantages to setting up a SOPARFI in Luxembourg for Brazilian companies. Firstly, Luxembourg has a stable and predictable legal and regulatory framework, making it an attractive destination for companies looking to expand their business in Europe. Secondly, Luxembourg is a hub for international business, with a well-developed financial sector and a skilled workforce. This makes it easier for Brazilian companies to access financing, expertise, and support as they expand their business in Europe.
Advantages of Having a Commercial Company in Luxembourg
Having a commercial company in Luxembourg also provides Brazilian firms with access to the wider European market. Luxembourg’s position as a gateway to doing business in Europe, combined with its good reputation, makes it an attractive destination for companies looking to expand their business.
Setting up a SOPARFI in Luxembourg offers several advantages for Brazilian companies looking to expand their business in Europe. From the favorable tax regime for dividends to the elimination of double taxation, a SOPARFI in Luxembourg provides a strong platform for Brazilian companies to grow their business in Europe. With its stable legal and regulatory framework, well-developed financial sector, and position as a gateway to Europe, Luxembourg is an attractive destination for Brazilian firms looking to expand their business internationally.
Damalion experts have been helping Brazilian private and corporate clients to launch their business in Europe. Please contact your Damalion expert now.
