Company Form

CHOOSING THE APPROPRIATE LEGAL FORM

Luxembourg offers a variety of legal structures for businesses and investment vehicles.

Choosing the right type depends on your goals, governance preferences, liability concerns, and tax strategy.

Beyond the company’s purpose, selecting the right legal form is crucial for ensuring operational flexibility, managing risk, and supporting future growth.

Below is an overview of the main legal forms and specific company types.

S.à r.l. (Société à Responsabilité Limitée)
Ideal for small and medium-sized businesses. It offers a lower minimum capital requirement and limits shareholder liability, making it a practical choice for closely held companies.

S.A. (Société Anonyme)
Designed for larger-scale operations. It allows greater confidentiality for shareholders and facilitates capital raising, but it requires a higher minimum share capital.

S.A.S. (Société par Actions Simplifiée)
Offers maximum flexibility in corporate governance. Increasingly popular among startups and as a modern holding structure, it allows shareholders to freely define management rules.

S.L.P. (Société en Commandite Spéciale)
A highly flexible and contractual partnership structure.
It has no legal personality, offering full freedom to organise governance and profit distribution among partners.
It is tax-transparent by default and widely used in private equity, real estate, and investment funds.

Note: SLP is the English equivalent term often used internationally for the SCSp.

Each form has important implications regarding shareholder responsibilities, corporate governance requirements, regulatory compliance, and capitalisation needs.

The choice of structure should align with your long-term strategic objectives, confidentiality requirements, and growth plans.

CHOOSING THE APPROPRIATE TYPE

Choosing the right structure is fundamental when planning your project. In Luxembourg, several business models exist to suit different needs from holding investments to managing private wealth or creating alternative investment vehicles.

1. SOPARFI (Société de Participations Financières)

Purpose: Investment holding, tax structuring, and asset protection.
Taxation: Subject to 25% corporate income tax, but benefits from dividend and capital gains exemptions under certain conditions.
Regulation: Must demonstrate economic substance, with management and decision-making located in Luxembourg.
Best suited for: Multinational groups, family offices, and entrepreneurs seeking efficient investment structures.

2. SPF (Société de Gestion de Patrimoine Familial)

Purpose: Managing private wealth linked to financial instruments.
Taxation: Exempt from corporate income tax, but liable for an annual subscription tax (0.25% of net assets).
Regulation: Restricted to private asset management; no commercial or financial services activities permitted.
Best suited for: Private individuals looking to structure and preserve wealth through diversified investments.

3. SCSp (Société en Commandite Spéciale) – Unregulated Alternative Fund

Purpose: Flexible investment fund vehicle, particularly suited for private equity, real estate, and venture capital.
Taxation: Tax-transparent; corporate income tax may be avoided if properly structured.
Regulation: Unregulated unless managed by a licensed Alternative Investment Fund Manager (AIFM).
Best suited for: Institutional and professional investors seeking contractual flexibility.

Each type comes with specific implications regarding shareholder obligations, corporate governance, regulatory compliance, and capitalisation.

The choice should align with your long-term objectives, confidentiality needs, and the planned growth of your company.