2024 Recent updates on Private Wealth Management Companies (“SPF”)

In the course of the year 2024, there have been several updates on the SPF tax regime in Luxembourg:

on 4 June 2024, the Luxembourg tax authorities issued a circular L.I.R. no. 159/2 (the “Circular”) to provide guidance on the tax residency certificates to be issued to private wealth management companies “SPF” under domestic law;
on 17 July 2024, the Luxembourg parliament has issued a draft law (n°8414) amending notably the amended law of 11 May 2007, on the creation of a SPF (the “Draft Law”).

The SPF tax regime in a nutshell
As per the law of 11 May 2007, related to the creation of a SPF (the “SPF Law”), a SPF is a company:

which adopts one of the following legal forms: limited liability company (société à responsabilité limitée), public limited company (société anonyme), limited partnership by shares (société en commandite par actions), cooperative company organized in the form of a public limited company (société cooperative organisée sous la forme d’une société anonyme);
whose exclusive purpose is the acquisition, holding, management and realization of financial assets, to the exclusion of any commercial activity;
which is held by eligible investors (i.e. individuals managing their private wealth or entities or intermediaries acting in the interest and on behalf of the private investors);
whose articles of association explicitly foresees that the entity is subject to the SPF Law.

A SPF is exempt from corporate income tax, municipal business tax and net worth tax. The SPF is only subject to the annual subscription tax of 0.25%.