A Family Wealth Management Vehicle is a bespoke legal entity designed to preserve, manage, and transfer family assets efficiently across generations
The SPF, or Société de Gestion de Patrimoine Familial, is a Luxembourg-based wealth management vehicle specifically designed for private individuals managing their personal and family assets. Introduced under the law of 11 May 2007, the SPF offers a flexible, tax-efficient structure tailored to estate and wealth planning. It is particularly appealing to high-net-worth individuals, families, and wealth managers seeking a simple, legally sound solution for holding and preserving private assets across generations.
Purpose and Scope
The primary purpose of the SPF is to acquire, hold, manage, and realise financial assets such as securities, bonds, shares, cash, and other portfolio investments. It is strictly limited to private wealth management and cannot be used to conduct commercial business, manage third-party assets, or hold real estate directly. This ensures that the vehicle remains exclusively dedicated to family investment and asset protection.
SPFs are commonly used to:
- Centralise and consolidate a family’s financial investments
- Facilitate intergenerational wealth transfers and succession planning
- Separate private assets from operational or commercial structures
- Protect family assets from legal and financial risks
- Invest in international portfolios with minimal regulatory burden
Legal Form and Features
An SPF may take several legal forms, including:
- Société Anonyme (SA)
- Société à Responsabilité Limitée (SARL)
- Société en Commandite par Actions (SCA)
These forms offer flexibility in governance, structuring, and shareholder participation. The choice depends on the number of investors, desired level of control, and administrative simplicity.
Importantly, the SPF is an unregulated entity. This means it is not subject to licensing or financial supervision by the Luxembourg financial regulator (CSSF), provided it operates strictly within the legal limits.
Eligible investors include:
- Private individuals acting on their own behalf
- Private wealth management entities acting exclusively for individuals
- Intermediaries representing eligible private investors (e.g., family offices or private banks)
Tax Treatment
The SPF benefits from a privileged tax regime, making it an attractive vehicle for tax-neutral asset holding. It is:
- Fully exempt from Luxembourg income tax, municipal business tax, and wealth tax
- Subject only to an annual subscription tax (taxe d’abonnement) of 0.25% on the net value of its assets, capped at €125,000 per year
To qualify for this exemption, the SPF must:
- Not engage in any commercial activity
- Not hold real estate directly (although indirect real estate holdings via funds or companies are permitted)
- Limit its investors to eligible private individuals or equivalents
The SPF does not benefit from Luxembourg’s double tax treaties or the EU Parent-Subsidiary Directive, as it is considered tax-exempt under Luxembourg law. However, this is generally immaterial since the SPF is designed as a passive holding vehicle.
Compliance and Reporting
As a non-regulated entity, the SPF is not required to publish annual accounts or file a tax return (except for VAT where applicable). However, it must:
- Maintain proper internal records and annual accounts
- Appoint a Luxembourg-based administrator (such as a fiduciary or law firm) to ensure compliance
- Register with the Luxembourg Trade and Companies Register (RCS)
Anti-money laundering (AML) and Know Your Customer (KYC) obligations apply, and the administrator must ensure ongoing monitoring of the SPF’s activities and beneficial ownership.
Why Choose an SPF?
The SPF provides a highly efficient and discreet solution for private asset holding. It offers:
- A clear and recognised legal framework for wealth preservation
- Favourable and predictable tax treatment
- Administrative simplicity with minimal regulatory burden
- Flexibility to structure holdings in both listed and unlisted securities
- The strength of Luxembourg as a jurisdiction for wealth management and estate planning
A Family Wealth Management Vehicle is a bespoke legal structure designed to preserve, manage, and transfer family assets efficiently across generations. It provides a flexible framework tailored to meet the unique needs of families, enabling centralised control, asset protection, and effective succession planning. This vehicle supports long-term wealth preservation while maintaining confidentiality and ensuring compliance with relevant legal and tax regulations.
