A Luxembourg private wealth management company, known as an SPF, “are not exclusive to high-net-worth individuals. Associations, corporations and even smaller family units can use such investment structures,” Aurélie Clementz, tax partner at Ogier, said in an interview. Photo: Ogier

A Luxembourg private wealth management company, known as an SPF, “are not exclusive to high-net-worth individuals. Associations, corporations and even smaller family units can use such investment structures,” Aurélie Clementz, tax partner at Ogier, said in an interview. Photo: Ogier

Luxembourg’s legal framework includes a variety of investment structures, including wealth management companies (SPFs). These provide advantages not only to high-net-worth individuals but also to associations and smaller family units aiming for tax efficiency and asset protection, says Ogier’s Aurélie Clementz.

Aurélie Clementz, a partner in Ogier’s tax team in Luxembourg, specialising in co-investment, private equity structuring, investment side letter negotiations and funds due diligence, discussed the structuring of family wealth management companies (société de gestion de patrimoine familial, or SPF) and the implications of a circular by the Luxembourg Inland Revenue (ACD) on 4 June 2024 in an interview. The circular aims to clarify the conditions under which an SPF, a special investment vehicle enjoying a broad tax exemption regime in Luxembourg, can be recognised as a resident for tax purposes as per the Luxembourg Income Tax Law.

Kangkan Halder: Can you briefly explain what family wealth management structuring entails and how it operates?

Aurélie Clementz: Family wealth management structuring is a sophisticated approach designed to organising and planning the management of a family estate in all respects, from private to professional assets. The structuring often helps for preservation, development and transfer of family wealth across generations.

It operates through the creation of legal and financial frameworks, which aim at managing assets efficiently and ensuring the longevity of wealth according to the family’s goals and values. Having the right level of tax and legal advice from day one is therefore very important to have an efficient structure, meeting all the commercial, business and family needs.

Could you elaborate on the benefits of structuring family wealth management through Luxembourg?

In Luxembourg, family wealth management structuring takes advantage of the jurisdiction’s political stability and sophisticated financial services industry, making it an ideal location for families seeking to protect and grow their wealth across generations.

Choosing Luxembourg as a base for structuring family wealth management offers a favourable legal environment for the implementation of sophisticated structures. The Luxembourg toolbox provides for a wide range of investment structures, such as private wealth management companies (société de gestion de patrimoine familial--SPF), which are designed to offer tax efficiency, confidentiality and flexibility in asset management.

Are these investment structures exclusive to high-net-worth individuals, or can companies or associations utilise them as well?

These investment structures are not exclusive to high-net-worth individuals. Associations, corporations and even smaller family units can use such investment structures to manage and protect their assets to the extent this would be relevant and worth for them.

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