Luxembourg offers the legal and regulatory benefits of being in the European Union. It is a jurisdiction regulated in a pragmatic and flexible way from both legal and tax perspectives. Through its highly developed financial services sector, Luxembourg is recognised as a platform for the structuring of complex international transactions.
Luxembourg has one of the most solid track records of stability, with an AAA credit rating, low levels of sovereign debt and one of the highest per capita GDPs globally. This economic and political stability, allied to the legal, regulatory and fiscal attributes of its financial services industry, has resulted in Luxembourg's position as one of the key players of the current and future worldwide financial system.
Luxembourg offers an attractive tax environment with a tailor-made approach for business creation. The tax framework is considered to be among the most stable and rewarding in Europe for companies and their shareholders.
Besides being the ideal jurisdiction to locate the holding company of worldwide structures, Luxembourg is also an ideal location for the exploitation and protection of intellectual properties.
While the corporate income tax rate is not low, the effective tax rate may be significantly reduced through two routes: the Parent-Subsidiary Directive adopted in the local tax code that provides for a full exemption of the dividends received and capital gains realised under certain conditions; and by the attractive intellectual property tax regime that provides for an 80% exemption for both income coming from intellectual property and capital realised on the sale of the intellectual property. At the liquidation of the Luxembourg vehicle, there is no taxation on the liquidation proceeds.
Luxembourg has almost 70 double taxation treaties and the network is constantly expanded. The treaties are generally based on the OECD model convention, giving assurance on their interpretation. Thanks to its treaty network, Luxembourg also offers extensive exemptions from withholding tax on dividends.
There are no controlled foreign companies rules and the thin capitalisation rules are generous.
- Establishment, domiciliation and administration of Luxembourg companies
- Financial reporting
- Direct and indirect tax compliance
- Corporate and legal compliance
- Secretarial services
- Provisions of independent directors
- Statutory audit
- Liquidation services
- Office space and meeting room facilities
- Escrow/Nominee services