Family Office in Luxembourg: Rules, Costs and Tax in 2026
Luxembourg regulates family office services under the Law of 21 December 2012: only members of the regulated professions listed in the law, including companies authorised as a Family Office professional of the financial sector (PSF) and supervised by the CSSF, may provide them. The law does not apply to services for a single individual or a single family, or for wealth entities belonging to them. Families use the SPF, a company reserved for managing private wealth that pays a 0.25% subscription tax instead of income tax, as well as ordinary companies and investment funds such as SIFs and RAIFs. [1, 2, 3, 4, 5]
Best for: Families who want an EU base with a dedicated private wealth company (the SPF) and regulated fund vehicles, where an office serving only one family needs no Family Office authorisation under the 2012 law.
At a glance
| Licence | No Family Office authorisation for an office serving one family (Article 1, 2012 law) |
|---|---|
| Minimum wealth | No minimum family wealth in the 2012 law or the CSSF conditions |
| Who counts as family | One individual, one family or wealth entities they own or benefit from; family undefined |
| Serving several families | Regulated professions or a CSSF-authorised Family Office PSF (EUR 50,000 capital) |
| Law and courts | Luxembourg statutes; 2012 Family Office Law and 1993 financial sector law, CSSF |
| Substance | Family Office PSF: head office in Luxembourg, two managers, approved auditor |
| Holding vehicles | SPF, ordinary companies, investment funds (UCI, SIF, RAIF) |
| Corporate tax | 16% corporate income tax from 2025; 23.87% combined in Luxembourg City; 0.5% wealth tax |
| Family office tax | No family office regime; SPF pays 0.25% subscription tax (EUR 1,000 to 125,000) |
| Personal income tax | 42% above EUR 234,870 (scale since 2025) plus up to 9% surcharge: 45.78% top rate |
| Inheritance tax | 0% on direct-line legal shares and spouses; up to 15% plus surcharges; gifts 1.8% direct |
| Wills and succession | Children reserved 1/2, 2/3 or 3/4 of the estate (1, 2, or 3 or more children) |
| Residence | Investor permit EUR 500,000, 3m or 20m; repeal voted 14 Oct 2026, not yet published |
| Time to set up | Family Office PSF: CSSF decision within 6 to 12 months; no figure for an SFO |
| Official fees | No official figure found |
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Licence and who qualifies
How is a family office licensed in Luxembourg?
No Family Office authorisation is needed for an office that serves only one family. Article 1 of the Law of 21 December 2012 excludes family office services provided between members of a single family, or for a single individual or a single family, or for wealth entities belonging to them or of which they are a founder or beneficiary. The regulated activity also excludes holding client cash or financial instruments and investment services under the 1993 financial sector law, which are regulated separately; families can hold financial assets through an SPF (Law of 11 May 2007). [4, 5]
What is the minimum wealth for a family office in Luxembourg?
No minimum family wealth is set in the Law of 21 December 2012 or in the CSSF authorisation conditions: the law regulates who may provide family office services to others and does not apply to an office serving a single family. A Family Office PSF needs share capital of at least EUR 50,000, which is a capital rule for the provider, not a wealth test for the family. [2, 5]
Who counts as family?
The exclusion covers a single individual, a single family, and their wealth entities, which the law defines as any company, contractual structure, foundation or trust owned directly or indirectly by that individual or family, or of which they are founders or beneficiaries. The law does not define 'family': the draft definition was dropped on the Council of State's advice (parliamentary committee report). [5, 6]
Can one office serve several families?
Providing family office services on a professional basis to more than one family is reserved to members of the regulated professions listed in Article 2 of the 2012 law and established in Luxembourg (credit institutions, investment advisers, private portfolio managers, specialised PSF authorised as Family Office, domiciliation agents or company set-up and management professionals, lawyers, notaries, auditors and accountants); doing so without one of these statuses is punishable by 8 days to 5 years in prison and a fine of EUR 1,250 to 125,000. A Family Office PSF is authorised under Article 28-6 of the Law of 5 April 1993: the CSSF grants specialised PSF authorisation on written application, only a legal person can be authorised as Family Office, share capital must be at least EUR 50,000, and the firm is supervised by the CSSF. [1, 2, 5, 7]
Law, substance and vehicles
Which law and courts apply?
Luxembourg statute law, passed by the Chamber of Deputies after opinions of the Council of State and published in the Mémorial (Legilux). Family office services are governed by the Law of 21 December 2012 on the Family Office activity and the Law of 5 April 1993 on the financial sector, under CSSF supervision. As an EU member state, Luxembourg transposes EU directives into its law (for example bill 8586 on the EU single permit directive). [2, 5, 7, 8, 9]
What substance is required?
For a Family Office PSF, the CSSF requires the central administration and registered office in Luxembourg, day-to-day management by at least two natural persons reachable by the CSSF (living in Luxembourg or the Greater Region, with a six-month exemption possible for one of them), and annual accounts audited by an approved statutory auditor (réviseur d'entreprises agréé). No substance rule for an office serving a single family was found. [2]
Which holding vehicles are available?
SPF (société de gestion de patrimoine familial, Law of 11 May 2007): limited to acquiring, holding, managing and selling financial assets, with no commercial activity and no direct ownership of real estate. Ordinary companies, which pay corporate income tax, municipal business tax and net wealth tax. Investment funds: undertakings for collective investment (UCI), specialised investment funds (SIF) and reserved alternative investment funds (RAIF). [3, 4, 10, 11]
Tax
What is the corporate tax rate?
From tax year 2025, corporate income tax is 16%; with the 7% employment fund surcharge (1.12 points) and municipal business tax of 6.75% in Luxembourg City, the tax administration (ACD) gives a combined nominal rate of 23.87%. The government says a further one-point cut is planned from tax year 2027 (a plan, not yet law as far as seen). Companies also pay net wealth tax of 0.5% (0.05% on wealth above EUR 500 million) with a minimum tax based on the balance sheet, as reported by Tiberghien. [10, 11, 12]
Are there tax incentives for family offices?
No tax regime specific to family offices was found; the 2012 law is a regulatory law. The SPF is exempt from income tax, municipal business tax and net wealth tax, and pays a subscription tax of 0.25% a year on paid-up capital plus share premium and debt above eight times that amount, with a minimum of EUR 1,000 (EUR 100 until 2024; raised from 1 January 2025 by the Law of 20 December 2024) and a maximum of EUR 125,000 a year, paid quarterly to the AED; since 25 December 2024 the AED can fine an SPF up to EUR 250,000 for serious breaches and withdraw its tax status. Investors must be individuals managing private wealth, entities acting only for such wealth, or intermediaries for them. SIFs and RAIFs pay a 0.01% subscription tax on net assets; UCIs pay 0.05% (0.01% in some cases). [3, 4, 13]
Is there personal income tax?
The top marginal income tax rate is 42%, on taxable income above EUR 234,870 in the base scale in force since tax year 2025; the ACD calls this the latest adaptation of the scale, and a government bill of June 2026 grants a temporary tax credit for 2026 instead of a mid-year change and plans to index the brackets by one step (x 1.025) from tax year 2027. A 7% employment fund surcharge is added to the tax, rising to 9% above EUR 150,000 of adjusted taxable income in tax classes 1 and 1a (EUR 300,000 in class 2), so the top combined marginal rate is 45.78% (42% x 1.09, our calculation). [14, 15, 16, 17, 18]
Is there inheritance or estate tax?
Inheritance tax (droits de succession) applies to the estate of a Luxembourg resident; for a non-resident, transfer duty applies only to Luxembourg real estate. Direct-line heirs pay nothing on their legal (intestate) share, spouses and partners registered for at least 3 years pay nothing, and estates up to EUR 1,250 are exempt. Base rates are 2.5% or 5% for direct-line heirs above their legal share, 6% or 15% for siblings, 9% or 15% for uncles, aunts, nephews and nieces, and 15% for others, raised by surcharges when a share exceeds EUR 10,000 (the official example reaches 36% on a 15% base). Gift duty is 1.8% in the direct line, or 2.4% when the gift is exempt from being brought back into the estate (dispense de rapport), 4.8% between spouses or partners registered for more than 3 years, 6% between siblings and 14.4% between unrelated persons (AED tariff, rates including the 2/10 surcharge). [19, 20]
Succession and residence
How do wills and succession work?
Under Article 913 of the Civil Code, gifts and wills may not exceed one half of the estate if the deceased leaves one child, one third with two children and one quarter with three or more, so children are reserved one half, two thirds or three quarters; gifts above the freely disposable part can be reduced when the estate opens. With no descendants, gifts and legacies may cover the whole estate (Article 916). For wills, the official guide names the AED's service for last wishes (Service des dispositions de dernière volonté) as a contact. [19, 21]
Can the family get residence?
Non-EU investors can apply for an investor residence permit (Article 53bis of the immigration law of 29 August 2008): at least EUR 500,000 in an existing Luxembourg company (keeping the investment and jobs for 5 years) or a new one (creating 5 jobs within 3 years), at least EUR 3 million in a management and investment structure with substance in Luxembourg, or at least EUR 20 million deposited with a Luxembourg financial institution for at least 5 years. Real estate investments do not count, the permit lasts up to 3 years and is renewable, and the Minister of the Economy or of Finance must approve first. Bill 8586, adopted by the Chamber of Deputies on 14 October 2026, repeals the investor permit; the Council of State's waiver of a second vote and publication in the Mémorial were not shown by 19 October 2026, and permits issued before the law takes effect stay valid until they expire (amendments of 15 April 2026). [9, 22, 23, 24]
Time and fees
How long does set-up take?
No official time for setting up a company or SPF was found. For a Family Office PSF, the CSSF says a decision is notified within six months of a complete application and taken within 12 months at the latest; no decision within 12 months means refusal. [2]
What are the official fees?
Not found in official sources. The CSSF page refers to the Grand-ducal Regulation of 23 December 2022 on CSSF fees, which was not opened, and company registration fees were not found. The SPF's recurring subscription tax (minimum EUR 1,000 a year) is a tax, shown under family office tax. [2]
Pros and cons
Pros
- An office serving only one family is outside the 2012 Family Office Law and needs no Family Office authorisation (Article 1 of the law).
- The SPF pays no income tax, municipal business tax or net wealth tax, only a 0.25% subscription tax (minimum EUR 1,000, capped at EUR 125,000 a year).
- No inheritance tax on direct-line heirs' legal shares or between spouses and partners registered for at least 3 years; direct-line gift duty is 1.8% or 2.4%.
Cons
- Ordinary companies pay a combined 23.87% in Luxembourg City from 2025 plus 0.5% net wealth tax, and personal income tax reaches 45.78%.
- The investor residence permit is being repealed: bill 8586 was adopted by the Chamber of Deputies on 14 October 2026.
- The SPF may hold only financial assets (no commercial activity, no real estate held directly), and children are reserved one half to three quarters of the estate.
