May Private wealth management company Société de gestion de patrimoine familial (SPF)

Transcription

1 May 2012 Private wealth management company Société de gestion de patrimoine familial (SPF)

2 Introduction On May 11, 2007, Luxembourg enacted a law regulating a private wealth management company, the so-called société de gestion de patrimoine familial ( SPF ). The SPF can be considered the successor of the well-known Holding 29, the tax exempt Luxembourg holding company which regime was considered by the European Commission to be illegal state aid. The SPF regime should not fall within the scope of the EU state aid rules as its scope is limited, i.e. a passive investment vehicle that is not allowed to engage in economic or commercial activities. 2

3 1. General Legal form of an SPF An SPF has to adopt the form of a public or private limited liability company (société anonyme or société à responsabilité limitée), a limited partnership having a capital divided into shares (société en commandite par actions) or a cooperative company organised in the form of a public limited company (société coopérative organisée sous forme d une société anonyme). The articles of association of an SPF have to state explicitly that the company is subject to the provisions of the law regulating the SPF, and after the indication of the legal form of the entity, SPF is to be mentioned. 2. Activities of an SPF The activities of an SPF are limited to the acquisition, holding, administration and sale of: (i) financial assets as defined in the law of August 5, 2005 on financial collateral arrangements (securities in the broadest sense, including options, derivatives and structured financial products); (ii) cash (including foreign currencies), and (iii) other assets (e.g. precious metals) held in an account with a professional financial service provider. An SPF is not allowed to perform commercial activities, such as trading in financial instruments, or providing financial services. An SPF cannot directly hold real estate. Nevertheless, real estate held directly for its own use or indirectly, through its participations, is allowed. Although an SPF is allowed to hold shares in other companies (even majority shareholdings), it should limit its involvement in its shareholdings to the exercise of shareholder rights (voting rights, right to receive dividends). An SPF may not (i) be actively involved in the management of the participations or (ii) render services of whatever nature. An SPF is not allowed to grant interest bearing loans, not even to participations (to a limited extent it may grant interest free advances to participations). 3. The investors in an SPF The investors eligible to invest in an SPF can be subdivided into three groups: Individuals acting in the context of their private wealth management; Private wealth entities (i.e. trust, foundation, a Dutch stichting, etc.) acting solely for one or several individuals; Intermediaries acting on behalf of either one stated above. 1 These exemptions did not apply for the fiscal year during which the SPF received at least 5% of its total dividends from participations in non- Luxembourg non-listed companies that are not subject to a tax equivalent to the Luxembourg corporate income tax. Taxation at an effective corporate income tax rate of at least 10.5% over a comparable taxable basis is considered to be so equivalent. However this provision was abolished per January 1, 2012 (Mémorial A no. 32 of February 23, 2012). 3

4 In conformity with the nature of an SPF, a confined Profit reserves are not part of the taxable basis. The group of investors (individuals) is eligible to invest in minimum annual subscription tax payable by an SPF an SPF as well. The shares in an SPF may not be is EUR 100 and the maximum is EUR 125,000. listed on a stock exchange. Distributions, whether in the form of dividends or interest payments or other, paid by an SPF are not 4. Financing activities subject to withholding tax, unless such distributions fall within the scope of savings withholding taxes. An SPF is exempt from corporate income tax, Non-residents will not be subject to capital gains municipal business tax and net wealth tax. taxation in Luxembourg upon the sale of all or part of An SPF is, however, subject to a subscription tax their interest in an SPF. 1 of 0.25% per annum. The basis for this tax is the aggregate of: Savings withholding taxes may be due if the SPF makes payments deriving from savings to (a) the paid-up share capital of the SPF; and individuals or certain so-called residual entities resident in an EU member state or certain associated (b) share premium of the SPF; and territories. In case the savings withholding tax results from the Luxembourg implementation of the EC (c) debt of the SPF to the extent it exceeds 8 times (a) and (b) combined. 4 Savings Directive, the withholding tax rate is 35%.

5 Such withholding may be avoided by, generallyspeaking, disclosing the name and address of the recipient and the amount of the payment made. In case the savings withholding results from the Luxembourg counterpart of the EC Savings Directive, the withholding is made at a rate of 10% and results in an income tax exemption of the net distribution in the hands of the recipient. Capital contributions to an SPF are not subject to capital duty. An SPF is not considered to be a VAT entrepreneur. As such, it cannot obtain a Luxembourg VAT registration and a VAT number. Luxembourg excludes the SPF from the application of its tax treaties. Accordingly, no regular residency certificates are issued by the tax authorities for an SPF. Note that in cases where treaty protection is sought for, regular companies may be interposed as so-called blocker entities. 5. Supervision and control The SPF is subject to the control of the Administration for Registrations and State Property. Each year, the domiciliation agent, the auditor or a chartered accountant has to certify that: the SPF has fulfilled its obligations as paying agent under the EC Savings Directive; and the conditions pertaining to the nature of the investors are fulfilled. There is no supervision by the Financial Sector Supervision Authority ( CSSF ), nor is a permit from the CSSF required. 5

6 6

7 About Loyens & Loeff Contacts Loyens & Loeff N.V. is the first firm where attorneys at Marc Meyers law, tax advisers and civil-law notaries collaborate on a T large scale to offer integrated professional legal services marc.meyers@loyensloeff.com in the Netherlands, Belgium and Luxembourg. Peter Moons Loyens & Loeff is an independent provider of T corporate legal services. Our close cooperation with peter.moons@loyensloeff.com prominent international law and tax law firms makes Loyens & Loeff the logical choice for large and mediumsize companies operating domestically or internationally. Pieter Stalman T pieter.stalman@loyensloeff.com Loyens & Loeff Luxembourg S.à r.l. Avocats à la Cour 18-20, rue Edward Steichen L-2540 Luxembourg T F Although great care has been taken when compiling this newsletter, Loyens & Loeff Luxembourg S.à r.l. does not accept any responsibility whatsoever for any consequences arising from the information in this publication being used without its consent. The information provided in the publication is intended for general informational purposes and can not be considered as advice. 7

8 Amsterdam Arnhem Aruba Brussels Curaçao Dubai Geneva Hong Kong London Luxembourg New York Paris Rotterdam Singapore Tokyo Zurich