Jurisdiction briefing · LU

Luxembourg

EU centre for fund structuring with a stable banking environment — high marginal rates but generous holding regimes.

0%CGT (long-held)

0%IHT (direct line)

€500kInvestor minimum

Last reviewed21 April 2026Orientation only · verify before acting

Tax snapshot

The position in figures.

Headline treatment for an individual tax resident. Source, asset and treaty rules can change the payable result.

Top marginal income tax~46%Including solidarity surcharge

Capital gains0% on long-held shares6-month holding period

Wealth tax0% on individuals—

Inheritance tax0% direct line—

Exit taxLimited—

CFC rulesEU ATAD—

Tax treaties~85—

Days for residency183—

Profile fit

Where the jurisdiction fits.

Best for

Family-office holding structures (SOPARFI)
Fund managers and asset-management professionals
EU residence for cross-border professionals using Luxembourg banking

Consider carefully

Buyers expecting low personal income tax (it’s not low)
Anyone needing inexpensive housing (Luxembourg City prices rival Geneva)

Routes and regimes

Programmes that matter.

Investor Residence Permit

€500k investment into an existing Luxembourg business, €500k into a new business + 5 jobs, €3M into a deposit, or €20M into management/maintenance with ongoing presence.

SOPARFI Holding Company

EU participation exemption regime for dividends/gains on qualifying participations (10%+ holding or €1.2M acquisition cost, 12-month period). Workhorse vehicle for European holding structures.

Planning risks

Pitfalls to resolve early.

01
Personal tax rates are high — Luxembourg is a structuring hub more than a personal tax haven.
02
Real estate is among the most expensive per square metre in Europe.
03
EU substance requirements increasingly bite on letterbox holding structures.

Frequently asked

Direct answers.

Why structure through Luxembourg?

EU passport, AAA rating, sophisticated fund regulator (CSSF), wide treaty network, participation exemption for qualifying holdings.

Is there inheritance tax in Luxembourg?

No inheritance tax in the direct line (between spouses, parents and children). Higher rates apply to siblings and unrelated heirs.

Is Luxembourg good for personal residency?

Best for people whose work or business genuinely centres on Luxembourg fund management, banking, or holding structures. Less attractive for pure tax optimisation than Monaco or Switzerland.