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Luxembourg: Offshore Legal and Tax Regimes

Introduction

This page was last updated on 25 June 2020.

The term 'offshore' is not used in Luxembourg legislation or in describing company forms. Use of the special 'holding company' forms is the key criterion for obtaining offshore tax treatment for most types of business; special forms are also available for collective investment vehicles and investment funds.

The EU Code of Conduct Committee's campaign against 'harmful tax practices', resulted in the abolition of most of the holding company regimes in 2007, and their replacement by the new SPF format, aimed at the asset management sector.

Investment funds pay a flat registration duty of €75 (at the time of writing) when they are established and an annual subscription tax of 0.25% of net asset value on the last day of the calendar quarter. For contributions to other types of business entities, there may be an exemption under the following circumstances (subject to certain conditions):

  • Share-for-share contribution;
  • All assets and liabilities contribution;
  • Conversion of retained earnings or reserves into share capital; or
  • Migration of capital within the EU.

 

 

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