Luxembourg offers two distinct holding vehicles for listed equity investments: the SOPARFI (société de participations financières) and the SPF (Société de gestion de patrimoine familial). Each company structure produces very different tax outcomes depending on investor profile, holding period, and portfolio strategy.
Why Luxembourg is used for listed equity holding
Luxembourg remains a preferred jurisdiction for holding listed equities due to legal certainty, EU market access, and a predictable tax framework.
- SOPARFI structures support group and cross-border holdings.
- SPF structures focus on private wealth and family office portfolios.
- Both vehicles may hold listed shares, but taxation differs materially.
First rule: SOPARFI and SPF are not the same thing
We highlight a frequent misconception. A SOPARFI is not a legal form but a fully taxable Luxembourg company used as a holding vehicle.
- SOPARFI vehicles are commonly set up as SA, SARL, or SCA companies.
- SPF vehicles operate under a specific private wealth tax regime.
What qualifies as listed equities
Listed equities generally refer to transferable securities admitted to trading on recognized markets.
- Shares traded on regulated markets or MTFs.
- Ordinary shares, preferred shares, ADRs, and depositary receipts.
- Equity ETFs are financial assets and may be held by both structures.
SOPARFI eligibility for listed equities
A Luxembourg SOPARFI may acquire listed equities globally, without geographic limitation.
- Minority and majority stakes are permitted.
- Strategic and financial investments are allowed.
- Trading activity remains taxable unless an exemption applies.
Tax rate applicable to taxable SOPARFI gains
Damalion highlights the reference rate applicable when the participation exemption does not apply.
- Luxembourg City effective corporate tax rate (2025): 23.87%.
- The rate combines corporate income tax, solidarity surcharge, and municipal business tax.
- Municipal rates vary outside Luxembourg City.
Dividend exemption conditions for SOPARFI holdings
The participation exemption for dividends depends on ownership thresholds and holding duration.
- Minimum holding of 10% or acquisition cost of EUR 1,200,000.
- Minimum holding period of 12 months or a holding commitment.
- The distributing company must qualify under Luxembourg tax rules.
Capital gains exemption conditions for SOPARFI holdings
Capital gains benefit from a higher acquisition threshold.
- Minimum holding of 10% or acquisition cost of EUR 6,000,000.
- Minimum holding period of 12 months.
- The issuer must meet qualifying tax criteria.
Short-term trades and small minority positions are commonly taxable.
Industry-driven practical cases
Some typical listed equity scenarios across sectors are for example:
- Semiconductors. EUR 2,000,000 invested in a US-listed chip designer may allow dividend exemption but not capital gains exemption.
- Consumer goods. Treasury portfolios holding EU and US consumer staples often remain taxable due to sub-threshold positions.
- Renewable energy. Strategic stakes above EUR 6,000,000 held for 12 months may qualify for capital gains exemption.
- Healthcare. Progressive build-up to a 10% stake can unlock dividend and gain exemptions.
Withholding tax considerations
Foreign dividend withholding tax remains a decisive factor in structure selection.
- SOPARFI vehicles may access tax treaties subject to substance.
- SPF vehicles generally absorb withholding tax as a final cost.
SPF usage for listed equities
The SPF regime is designed for passive private wealth management.
- Typical users include entrepreneurs and family offices.
- Assets often include listed shares, bonds, funds, and cash.
SPF tax framework
Damalion highlights the defining tax features of the SPF.
- No corporate income tax or net wealth tax.
- Annual subscription tax of 0.25%.
- Minimum tax of EUR 1,000 and maximum of EUR 125,000.
SPF regime restrictions
The SPF regime is subject to strict eligibility rules.
- Reserved for private wealth activities.
- No commercial or operational business.
- Institutional investors are excluded.
SOPARFI vs SPF decision framework
Damalion highlights the decisive criteria.
- Group integration and treaty access favor SOPARFI structures.
- Pure private wealth strategies favor SPF structures.
- Active trading requires careful SPF perimeter control.
- Large strategic stakes may justify SOPARFI participation exemption planning.
Key figures at a glance
- SOPARFI taxable rate (Luxembourg City): 23.87%.
- Dividend exemption threshold: 10% or EUR 1,200,000.
- Capital gain exemption threshold: 10% or EUR 6,000,000.
- SPF subscription tax: 0.25% (EUR 1,000 min / EUR 125,000 cap).
FAQ: Soparfi or SPF Vs Listed equities
1) Can a Luxembourg SOPARFI acquire listed shares globally? ▸
Yes. A SOPARFI may acquire listed equities in any jurisdiction.
2) Are short-term trading gains taxable in a SOPARFI? ▸
Yes. Gains are taxable at 23.87% in Luxembourg City when no exemption applies.
3) Can an SPF sell listed shares without Luxembourg income tax? ▸
Yes. Capital gains are exempt, subject to the annual subscription tax.
Glossary terms: Soparfi or SPF Vs Listed equities
SOPARFI (Société de Participations Financières)
A Luxembourg fully taxable company commonly used as a holding vehicle for equity investments, financing, and group structuring.
SPF (Société de gestion de Patrimoine Familial)
A Luxembourg entity governed by a special tax regime and reserved exclusively for the management of private wealth through passive financial investments.
Listed Equities
Shares or equity securities admitted to trading on a regulated market or a multilateral trading facility, including recognized stock exchanges.
Participation Exemption
A Luxembourg tax regime allowing the exemption of qualifying dividends and capital gains, subject to ownership thresholds, holding periods, and issuer conditions.
Corporate Income Tax (CIT)
A tax levied on the taxable profits of a Luxembourg company, including capital gains and non-exempt investment income.
Municipal Business Tax (MBT)
A local tax imposed by Luxembourg municipalities on business profits, forming part of the combined corporate tax burden.
Solidarity Surcharge
A surcharge applied to corporate income tax in Luxembourg, contributing to the effective overall tax rate.
Minority Shareholding
An equity participation representing less than 10% of the share capital or voting rights of a company.
Strategic Shareholding
A significant equity investment intended to support long-term influence, alignment, or group strategy rather than short-term trading.
Holding Period Requirement
The minimum duration during which a qualifying participation must be held in order to benefit from the Luxembourg participation exemption.
Qualifying Participation
An equity interest that satisfies the ownership threshold, holding period, and issuer taxation criteria under Luxembourg law.
Capital Gain
The positive difference between the disposal price of an asset and its acquisition cost, realized upon sale or transfer.
Dividend Income
A distribution of profits by a company to its shareholders, typically subject to withholding tax at source.
Withholding Tax
A tax deducted at source by the distributing company’s jurisdiction, usually applied to dividend payments on listed equities.
Tax Treaty Network
A system of bilateral agreements through which Luxembourg may reduce or eliminate foreign withholding taxes, subject to eligibility conditions.
Subscription Tax
An annual tax applicable to SPF entities, calculated as a percentage of their taxable base and capped by statutory limits.
Private Wealth Management
The holding and administration of financial assets for private individuals or family structures without engaging in commercial activities.
Commercial Activity
Economic operations carried out with the intention of generating income through active business participation, which are prohibited for SPF entities.
Treasury Portfolio
A portfolio of financial instruments held by a company to manage excess liquidity, currency exposure, or short-term investment needs.
Regulatory Eligibility
The requirement that investors, activities, and assets comply with the legal conditions governing SOPARFI or SPF structures under Luxembourg law.