SOPARFI: what is a Luxembourg holding company for?
SOPARFI is not a legal form but the common name for a Luxembourg company that holds participations. Here is what it allows, under which conditions, and what to check.
What a SOPARFI is
A SOPARFI is a capital company, most often a S.à r.l. or a S.A., whose activity is to hold and manage participations. It remains subject to tax but can benefit from exemptions on dividends and capital gains received from its subsidiaries.
The conditions to check
- A holding threshold and a holding period in the subsidiary, set by law.
- A sufficient level of taxation of the subsidiary.
- Real management and substance in Luxembourg.
- Compliance with filing duties, the RBE and anti-money-laundering rules.
When it is useful
A holding company helps to group participations, organise a sale or a distribution, or hold foreign subsidiaries from a stable framework. A tax analysis of your specific situation is still needed before any decision.
Frequently asked questions
Is a SOPARFI a company form?
No. It is a use of the S.à r.l. or the S.A. The term describes the holding function.
Can it hold UK subsidiaries?
Yes, subject to the conditions of the regime and the applicable tax treaty. A case-by-case analysis is needed.
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