Companies & entities
Setting up a SOPARFI in Luxembourg
A SOPARFI is an ordinary Luxembourg company (most often an SARL or an SA) whose activity consists of holding and financing participations. It benefits from the parent-subsidiary regime but must demonstrate genuine substance, in particular in light of the anti-abuse rules in force (ATAD I and II, abuse of law). The firm structures the SOPARFI and secures its substance.
In short
The SOPARFI in Luxembourg is an ordinary company, often a SARL or an SA, whose activity consists in holding and financing shareholdings. It benefits from the parent-subsidiary regime but must show real substance, notably in light of the anti-abuse rules in force (ATAD I and II, abuse of law). Cerno Law Firm structures it and documents its substance.
Responsible for legal content: Maître Cora Maglo, Avocate à la Cour, Liste I du Barreau de Luxembourg depuis 2009. · Applicable law: Luxembourg
Setting up a SOPARFI in Luxembourg: key points at a glance
| Item | What to know |
|---|---|
| Fees | On a quote basis. Depending on the complexity of the structure and the scope of the substance work. |
| Indicative timing | Incorporation is comparable to that of an SARL or SA; building substance is planned over the longer term. |
| Documents required |
|
| Deliverables |
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The SOPARFI (societe de participations financieres) is the classic vehicle for holding participations in Luxembourg. It is not a distinct corporate form: it is a commercial company whose corporate object is the management of participations.
The challenge lies not in incorporation but in substance and compliance: without sufficient substance, the benefits of the regime may be called into question. Cerno structures the SOPARFI and documents its substance.
Setting up a SOPARFI in Luxembourg: when should you call on the firm?
You hold, or are about to hold, participations and are looking for an efficient and compliant structure.
A holding company without genuine substance is increasingly exposed.
What happens if you do nothing?
Reclassification, loss of the benefits of the parent-subsidiary regime, exposure under the anti-abuse rules in force (abuse of law, anti-abuse clause of the parent-subsidiary directive).
Insufficient substance: the registered office, governance, resources and decision-making must be genuinely located in Luxembourg.
How does the firm step in?
Structuring the SOPARFI, drafting the corporate documents and supporting governance, with particular attention paid to substance.
Assistance in assembling the substance file.
Practice areas
When to call on the firm
- Hold participations in several companies.
- Finance a group through a Luxembourg holding company.
- Prepare a disposal or a reorganisation.
- Strengthen the substance of an existing holding company.
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See fees for this areaThe SOPARFI and substance
The parent-subsidiary regime can be challenged in the event of abuse: a SOPARFI must therefore have genuine substance (premises, effective governance in Luxembourg, resources and local decision-making). The European project known as ATAD III (Unshell), abandoned in 2025, is not in force; the applicable rules are those of ATAD I and II and of national law.
The firm helps you assess your exposure and assemble a robust substance file.
FAQ
Frequently asked questions
Is the SOPARFI a separate legal form?
No. It is an ordinary commercial company (most often an SARL or an SA) whose corporate object is the holding of participations; it benefits from the parent-subsidiary regime.
What is the substance of a SOPARFI?
It is the set of genuine elements (registered office, governance, resources, local decision-making) that demonstrate the company is not a shell. The anti-abuse rules in force (ATAD I and II, abuse of law) make it a central criterion.
Can the firm audit my existing SOPARFI?
Yes. The firm carries out a substance review and proposes a compliance plan.
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Founded in 2013; Maître Cora Maglo has been admitted to the Luxembourg Bar since 2009
- 2013
- independent firm
- 2009
- at the Bar since 2009
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Avocate à la Cour, List I of the Luxembourg Bar since 2009
Trained at the London School of Economics, formerly at Clifford Chance and Bonn Steichen & Partners
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Had a consultation with Me Cora Maglo about my Luxembourg Blue Card application. She explained everything clearly: the process, timeline and documents I need, and helped me with my wife’s family reunification too. Honest and practical advice. I felt confident after talking to her.F. P.J’ai beaucoup apprécié le service de Maître Maglo : son sérieux, sa sympathie, son professionnalisme et sa disponibilité. Toujours répondu rapidement et clairement, avec des conseils pragmatiques, sans pousser à des procédures longues et coûteuses lorsqu’elles ne sont pas justifiées.N. W.Super assistance and great support! Highly recommend. All my questions were answered, Cora and her team kept me updated all the time. I will definitely reach out to them next time for my residency.T.They talk about us
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