Asset Protection in LuxembourgUpdated on Friday 10th June 2016
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Luxembourg is an attractive destination for asset protection as it is an important financial hub in Europe and it offers a favorable taxation system and a stable business and political environment. Many foreign investors choose this country that is located strategically in Europe and has French, German and Luxembourgish as the official languages, but also English is widely spoken. They benefit of a wide range of financial services provided by experienced specialists who can offer precious information about legal methods of tax minimization and asset protection in Luxembourg.
A distinctive category of clients interested in financial services in Luxembourg is that of individuals and companies that are interested in asset protection. Our lawyers in Luxembourg offer many solutions for rich families who want to protect their assets, by investing them in order to grow their total possessions on a medium and long term. Our investing strategies are tailored to our clients’ needs, related to the characteristics of their assets.
We offer guidance for banking procedures and we collaborate with a large variety of banks in Luxembourg that assure the secrecy of their operations to a certain point.
The asset protection in Luxembourg can be done through a certain methods, such as:
- SPF (Société de gestion de patrimoine familial),
- special tax regime for: intellectual property rights, expatriates and companies,
- Luxembourg life insurance contract seen as an investment tool.
SPF in Luxembourg
The SPF (Société de gestion de patrimoine familial) benefits from a special taxation regime and has the main objective of managing the wealth of individuals, being the most common tool for this purpose in Luxembourg. This type of company is not allowed to perform any type of commercial activities and it can only acquire, hold and manage the assets of individuals. The SPF cannot be used by corporate investors who want to manage their assets.
The most important thing to know is that a SPF is exempt from paying the corporate income tax, wealth tax and municipal business tax, but it has to pay a registration tax on a yearly base at the rate of 0.25% (minimum EUR 100 and maximum EUR 125,000).
This tax is calculated on the amount of the paid-up capital and the share premiums. For details about the calculation of this tax and other information, you may contact our representatives in Luxembourg.
Special tax regime
Certain categories of individuals and companies in Luxembourg can benefit of a special taxation regime. The owners of intellectual property rights are allowed to receive a tax exemption of 80% calculated on the net income obtained from royalties for using the intellectual property rights and the same exemption for the revenue they get after selling the intellectual property rights.
Benefits for individuals and companies
Luxembourg offers very good conditions of asset protection for individuals: low taxes, trustful banks and financial experts, most documents are written in French, German or English etc. The expatriates can benefit of a special tax regime that came into force in 2011 and that offers them the possibility of tax relief related to relocation costs. They also can receive tax deductions and save important amounts of money.
The companies can also benefit of the favorable tax regime, especially the holdings, such as tax exemption for dividends and capital gains in certain situations.
Life insurance contracts in Luxembourg
Life insurance can be used in Luxembourg as an investment tool and the legislation in this country offers a good protection for the investors choosing this type of protection. The insurance is a long term investment that includes financial vehicles, a special tax and legal provisions.
The owners of different types of assets can use this form to put them into different types of investment funds in order to obtain income.
For more details about the investments that can be done, you may contact our financial consultants in Luxembourg.