A LU SOPARFI may be used to :
- Hold participations in Private Equity;
- Finance others entities;
- Hold real estate in Luxembourg or overseas, directly or through a company;
- Hold financial assets (financial instruments, bonds for instance);
- Own intellectual property rights to perceive royalties;
- Exercise management control over others entities.
SOPARFIs are subject to the General Tax regime. Therefore, the overall rate of corporation taxes is 29.22% which includes the corporate tax income (21%) on which a 7% solidarity surcharge is added and the municipal tax income at a rate of 6.75%.
SOPARFIs are also subject to an annual net wealth tax at a rate of 0.5% on their worldwide income but are exempted from the withholding tax in case of a full or partial liquidation of a fully taxable company. Likewise, there is no withholding tax on fixed or floating rate interest payments made to corporate lenders and on royalty payments.