Who can invest in an SPF?

Private individuals managing family wealth and certain wealth vehicles acting for them; it is not intended for institutional pooling for third parties.

Does the SPF have treaty access?

No, the SPF usually does not benefit from double tax treaties because of its specific private wealth purpose.

How are dividends and gains handled in the SPF?

They contribute to the net asset base used to compute the subscription tax; standard corporate taxes generally do not apply at SPF level.

How are investor distributions taxed?

Taxation occurs at the investor level based on their personal tax rules and residence.

What governance is expected?

Clear articles stating purpose and limits, documented board meetings, banking controls, and accurate annual reporting for the subscription tax.

How do banks review an SPF application?

They assess ownership clarity, investor eligibility, source-of-wealth evidence, expected flows, and internal controls.

Can the SPF be combined with other vehicles?

Yes, families often combine an SPF with a holding company and special purpose vehicles to ring-fence assets and plan exits.

What ongoing compliance is required?

Maintain corporate records, hold meetings in Luxembourg, compute and pay the subscription tax annually, and keep scope within permitted activities.

Where can I read more on related Luxembourg options?

See our pages on Luxembourg holding companies, hedge funds, and RAIF taxation for complementary routes depending on your objectives.

Useful guide about Luxembourg family wealth management company or Société de Gestion de Patrimoine Familial (SPF)

Name: Useful guide about Luxembourg family wealth management company or Société de Gestion de Patrimoine Familia ...
Uploaded: 2023-09-02T18:46:52+00:00
Channel: KNOWLEDGE CENTER
Description: Luxembourg société de gestion de patrimoine familial or family wealth management company to help you manage your wealth

by KNOWLEDGE CENTER | Sep 2, 2023 | Corporate Structuring

In the world of wealth management and private asset management, the Luxembourg Société de Gestion de Patrimoine Familial, or SPF (family wealth management company), holds a unique position. Established under Luxembourg law, specifically the modified Law of May 11, 2007, the SPF serves as a legal framework for managing private wealth. This comprehensive guide will delve into the key aspects of SPF, its general provisions, and its tax implications. We’ll also explore the recent changes that affect SPF operations.

General Provisions about the Luxembourg private wealth management company

Defining the SPF

The Société de Gestion de Patrimoine Familial, commonly referred to as SPF, is a legal entity created by the Law of May 11, 2007. Its primary purpose is to provide a legal framework for managing private wealth. The SPF is designed to be an investment vehicle exclusively for individuals, allowing them to manage their private assets effectively.

Legal Structure

An SPF can take on various legal forms, including a société à responsabilité limitée (SARL), société anonyme (SA), société en commandite par actions (SCA), or société coopérative organized as a société anonyme. However, it’s important to note that the SPF’s exclusive purpose must be the acquisition, holding, management, and realization of financial assets, with no involvement in commercial activities.

Limited Involvement

One crucial aspect of an SPF‘s operation is its limited involvement in the management of other companies in which it holds a stake. The SPF is not allowed to interfere with the management of such companies. Furthermore, it is prohibited from granting remunerated loans, even to the companies in which it holds an interest. However, the SPF may provide advances or guarantees to the companies as a subsidiary and purely gratuitous action.

Real Estate Holdings

As of July 1, 2021, the SPF is explicitly prohibited from directly acquiring real estate properties (unless indirectly through participations or shares). Additionally, it cannot hold real estate assets through entities defined in paragraph 11bis of the modified Law on Fiscal Adaptation of October 16, 1934 (Luxembourg or foreign partnership companies) or through one or more common investment funds (FCPs). This restriction applies to both Luxembourg FCPs and foreign entities with legal and tax regimes equivalent to Luxembourg FCPs. .

Tax Provisions

Exclusion from European Directive

One significant tax consideration for SPFs is their exclusion from the benefits of the European directive on parent and subsidiary companies. This exclusion sets the SPF apart from other corporate entities in terms of tax treatment.

Dividend Taxation

Dividends distributed by an SPF are not subject to withholding tax at the source. However, this exemption does not exempt the recipients from potential taxation on these dividends under the Luxembourg tax regime (Article 147, paragraph 3 L.I.R.). It’s important to note that the 50% gross dividend exemption provided by Article 115, paragraph 15a L.I.R. does not apply to SPF dividends.

Interest Payments

Interest payments made by an SPF to beneficial owners are subject to the Luxembourg withholding tax, known as RELIBI (retenue libératoire luxembourgeoise).

Non-Resident Tax Treatment

For non-resident individuals, income derived from the sale of a stake in an SPF is not considered domestic income (Article 156, paragraph 8, letter c L.I.R.). This can have significant implications for tax planning for non-resident investors.

Secrecy and Tax Authorities

The SPF is added to the list contained in paragraph 178 bis of the modified General Tax Law of May 22, 1931, establishing a professional secrecy privilege in relation to tax authorities.

Regulatory Oversight

Apart from specific verification related to payments made by an SPF using form 510bis, the tax authority responsible for overseeing SPF compliance is the Administration de l’Enregistrement, des Domaines et de la TVA (AED).

Recent Changes

Legislative Update

It’s crucial to stay up-to-date with changes in legislation that affect SPFs. For instance, Article 11 of the Law of December 19, 2020, regarding the State’s revenue and expenditure budget for 2021, introduced amendments that impact SPF operations. Understanding these updates is essential for compliant and effective wealth management.

The Société de Gestion de Patrimoine Familial (SPF) offers a specialized and advantageous structure for managing private wealth in Luxembourg. Its unique legal framework and tax provisions make it an attractive option for individuals seeking effective wealth management and asset protection. However, it is essential to navigate the specific rules and regulations governing SPFs, especially considering recent legislative changes. By doing so, individuals can make informed decisions about whether an SPF is the right vehicle to manage their private assets and investments.

To manage your wealth by using a Luxembourg SPF or family wealth management company, please contact your Damalion expert now.

This guide helps entrepreneurs and families evaluate the Luxembourg Private Wealth Management Company (SPF) with clear steps, investor eligibility, and the 2025 subscription tax update.

For investors, entrepreneurs, family offices, family businesses

Last updated: 10 September 2025

What are the key features and benefits of a Luxembourg SPF?

Before you proceed, align your family objectives, governance, and banking expectations so the SPF remains simple and compliant.

Purpose-built for private wealth. Holds financial assets for eligible investors without commercial activity.
Tax simplicity. Exempt from corporate income tax, municipal business tax, and net wealth tax; subject to an annual subscription tax on net assets.
Bankable governance. Straightforward board rules, clear signatories, and predictable reporting.
Flexible holding of securities. Can hold shares, bonds, funds, and similar financial instruments.
Privacy and continuity. Structured ownership and documented distributions aid intergenerational planning.

For background on holding structures see SOPARFI Luxembourg and for fund options review Luxembourg RAIF tax regime.

How do you set up and keep an SPF compliant?

Use this short sequence to move from decision to a working, bankable SPF.

Define scope and investors. Confirm that all contributors are eligible investors and that assets are financial in nature.
Choose the company form. Typically a société anonyme (SA) or société à responsabilité limitée (S.à r.l.) configured to qualify as an SPF.
Draft articles and governance. Describe purpose, no commercial activity, share classes, decision rules, and distributions.
Open banking and treasury. Prepare KYC, source-of-wealth evidence, payment limits, and signature matrix.
Register and file. Complete notarial incorporation and trade register steps; enroll for the subscription tax.
Operate within scope. Hold only eligible assets, document flows, and prepare an annual net asset base for the subscription tax.

For a step-by-step incorporation example of a Luxembourg company see how to register a Luxembourg S.à r.l..

Frequently asked questions about the Luxembourg SPF

These answers reflect the current framework, including the 2025 subscription tax changes.

What is a Luxembourg SPF in one sentence?

An SPF is a private wealth holding company that may manage financial assets for eligible investors and is taxed via a yearly subscription tax instead of corporate income tax.

Who qualifies as an eligible investor?

Individuals managing private wealth, interposed wealth vehicles acting for individuals, and certain family estate entities. Professional investors acting on behalf of others are outside scope.

Which assets can an SPF hold?

Financial assets such as shares, bonds, fund units, deposits, and similar instruments. It should not conduct commercial activity or provide services to third parties.

What is expressly not permitted?

No commercial trading, no active management services to non-group third parties, and no activities that would recharacterize it as a commercial enterprise.

How is the SPF taxed in 2025?

It pays an annual subscription tax calculated on net assets and is generally exempt from corporate income tax, municipal business tax, and net wealth tax.

What changed for the subscription tax in 2025?

The annual subscription tax now includes an updated minimum and maximum cap starting with the 2025 period. Model your budget using the current minimum and maximum to avoid under- or over-accrual.

Does the SPF have access to double tax treaties?

No. The SPF usually does not benefit from treaty protection because it is a dedicated private wealth vehicle.

Can an SPF own real estate directly?

Direct commercial real estate activity is outside the intended scope. Indirect exposure may be possible via financial instruments issued by real estate holding entities.

How are dividends and gains treated at the SPF level?

They are part of the net asset base for subscription tax purposes; the SPF is otherwise not subject to standard corporate taxes under its regime.

Are distributions to shareholders taxed?

Taxation occurs at the investor level according to their personal tax rules and residence. The SPF is designed to be tax-neutral at company level.

What substance and governance are expected?

Clear purpose in articles, board oversight, documented meetings in Luxembourg, banking controls, and accurate annual reporting for the subscription tax.

How do banks evaluate an SPF file?

They review ownership clarity, investor eligibility, source-of-wealth documentation, expected flows, and internal controls such as payment limits and dual signatures.

How long does incorporation take?

Once the bank account is in place and documents are prepared, the notarial act and registrations can be completed efficiently; timing is mainly driven by bank onboarding and completeness of KYC.

Can an SPF sit within a broader group structure?

Yes. Families often combine an SPF with a holding company for operating stakes and use special purpose vehicles for specific assets or co-investments.

Where does Damalion help in practice?

We align the structure with eligibility and asset scope, coordinate banking, prepare governance and documentation, and design a simple reporting routine for comfort with advisors and counterparties.

Topic	SPF at a glance
Purpose	Private wealth holding of financial assets for eligible investors
Taxes	Annual subscription tax on net assets; generally no CIT, MBT, NWT
Treaties	No treaty access
Assets	Shares, bonds, fund units, deposits, and similar instruments
Not permitted	Commercial activity or services to third parties

Explore related topics: family trusts, Luxembourg hedge funds, and Luxembourg holding companies.

Useful guide about Luxembourg family wealth management company or Société de Gestion de Patrimoine Familial (SPF)