SOPARFI or SPF in Luxembourg, which holding vehicle to choose?
The SOPARFI is a fully taxable company that holds participations and benefits from the participation exemption; the SPF is a private wealth-management vehicle, exempt from income tax but reserved for eligible investors and with no commercial activity. The choice depends on activity, investors and access to tax treaties.
The SOPARFI (financial holding company) is an ordinary fully taxable capital company benefiting from the participation exemption (art. 166 LIR). The SPF (family wealth management company, law of 11 May 2007) is a passive vehicle reserved for eligible private investors, exempt from income tax but excluded from tax treaties.
Key takeaway
- SOPARFI: active participations, treaty access, activity possible, fully taxable but exemptions on qualifying participations.
- SPF: passive private financial wealth, income-tax exempt, but no treaties and no commercial activity.
- The wrong choice is costly: we scope it to your assets, investors and target taxation.
SOPARFI vs SPF: comparison table
| Criterion | SOPARFI | SPF |
|---|---|---|
| Purpose | Holding and managing participations, activity possible | Passive management of private financial wealth |
| Taxation | Fully taxable (~23.87% in Luxembourg City, 2026), participation exemption art. 166 LIR | Exempt from income tax; 0.25% subscription tax |
| Commercial activity | Allowed | Prohibited |
| Tax treaties | Yes (and parent-subsidiary directive) | No (excluded) |
| Investors | No restriction | Reserved for eligible private investors |
| Direct real estate | Possible (often via dedicated structure) | Not allowed directly |
| Legal basis | Law 10.08.1915; art. 166 LIR | Law of 11 May 2007 |
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