Luxembourg: Types of Company

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- LUXEMBOURG SOCIETE ANONYME (JOINT STOCK COMPANY)

- LUXEMBOURG SOCIETE A RESPONSIBILITE LIMITE
- LUXEMBOURG GENERAL PARTNERSHIP
- LUXEMBOURG LIMITED PARTNERSHIP
- LUXEMBOURG BRANCH OF OVERSEAS COMPANY
- LUXEMBOURG 'HOLDING' COMPANY

In July, 2006, the European Commission ordered the government of Luxembourg to dismantle its
system of tax breaks for financial holding companies, after concluding that the preferential tax regime
in favour of Luxembourg’s Exempt, Milliardaire and 1929 Financial Holding companies violates EC
Treaty state aid rules. (The existing regimes are described in Offshore Legal and Tax Regimes.)

Luxembourg did finally abolish the holding company regimes as of 1st January 2007, allowing existing
companies to retain their tax benefits until 2010. As originally drafted, the legislation would have
removed tax benefits from any company that changed its share-holdings during the 'grandfather'
period.

The replacement for the holding company regime is the Family Private Assets Management
Company, or SPF, brought into being in 2007, and aimed at the wealth management sector.

Luxembourg Societe Anonyme (Joint Stock Company)

The Societe Anonyme, abbreviated SA, or joint stock company, is formed under the Commercial
Companies Law 1915, as amended. SAs must have a minimum capital of around EUR31,000 divided
into freely transferable shares held by at least two shareholders, who may be resident or non-resident
persons or juridical entities. The shareholders' liability is limited to the amount of their subscribed (not
necessarily paid-up) capital. There is a Board of Directors (at least three), and day-to-day
management may be delegated to a managing director.

Incorporation takes 2 or 3 days; the SA's statutes must be printed in French or German; a director
must give his name, address and occupation. There must be registered office in Luxembourg, but
only the share register need be kept there. Accounts need to be submitted annually to the Registrar of
Companies, but need only be audited if a company exceeds a certain size: either the balance sheet is
greater than EUR3.125m, or sales are greater than EUR6.25m, or there are more than 50 employees.

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Luxembourg Societee a Responsabilite Limitee (Limited Liability Company)

The Societe a Responsabilite Limitee, abbreviated SARL, or limited liability company, is also formed
under the Commercial Companies Law 1915, as amended. The SARL must have a minimum paid-up
capital of around EUR12,400 divided into 'participation certificates' which are not freely transferable.
There may not be more than 40 shareholders, and they are liable for the amount of their paid-up
capital. If there are fewer than 25 shareholders an annual gemeral meeting is not necessary.

In other respects, the SARL is similar to the SA.

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Luxembourg General Partnership

General Partnerships are recognised in Luxembourg law either as a Societe Civile (most professional
partnerships take this form) or as a Societe en Nom Collectif (for instance, a family business might
choose this form). The partners are liable jointly and severally for the full debts of the partnership.
Partnerships must be registered with Greffe du Tribunal de Commerce.

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Luxembourg Limited Partnership

Limited partnerships in Luxembourg have general partners, who are responsible for management,
and have unlimited liability, and limited partners, who are liable only to the extent of their capital
contributions to the partnership. A limited partnership can either be a Societe en Commandite Simple
in which case it is subject to the same rules as a general partnership, or it can be a Societe en
Commandite par Actions, in which case the limited partners are issued with shares and the
partnership is treated in the same way as an SA (see above) in most respects.

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Luxembourg Branch of Overseas Company

An overseas company can carry on business in Luxembourg through a branch office, but will need to
obtain a permit as does every business. A branch office will normally constitute a permanent
establishment from a tax point of view (see Domestic Corporate Taxation).

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Luxembourg 'Holding' Company

The Luxembourg Holding Company, the 'Soparfi' (Societe a Participation Financiere) and now the
SPF are the forms which permit 'offshore' activity in Luxembourg: see Offshore Legal and Tax
Regimes for a full description. However, they are not separate legal forms as such, and employ one of
the above forms, either SA, SARL or Societe en Commandite par Actions, as a legal base.

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