History of Luxembourg
Luxembourg, or the Grand Duchy of Luxembourg, is a small country (2,586 km2) located between France, Germany and Belgium. Luxembourg has a varied culture, with three official languages: French, German and Luxembourgish. Luxembourg is one of the founders of the European Union and is well-known for its diverse economy, as well as for its GDP per capita, the highest in the world.
Luxembourg as an Onshore Financial Services Centre
Luxembourg enjoys an excellent reputation internationally, but it should be noted that its taxation is not lower than other European countries. However, its tax system is very generous for a certain type of onshore company: a holding company.
Indeed, Luxembourg holding companies are exempt from tax, as are the dividends paid to them. These companies are known in Luxembourg as SOPARFI and there are 12,000 of them. It is, however, possible to create a limited liability company, a limited company, a venture capital investment company, a branch or a representative office. Luxembourg also provides its companies with a high level of confidentiality and high-quality banking secrecy.
Luxembourg is a unique jurisdiction because each solution must be individually tailored to the client’s needs. In Luxembourg the domiciliary agent as well as the directors and managers are responsible for the actions of the company and because of this Luxembourg is most suitable for sizeable projects where the founders wish to have a presence on site. This jurisdiction is mainly used by holding companies and investment funds rather than for trading companies.