A Luxembourg holding company is an excellent corporate vehicle choice for holding investments, to use as a management vehicle for a group of companies, or for holding patents and licences.

 If properly structured, a Luxembourg company can house international, tax-exempt profits. To qualify for this tax-exempt status, a Luxembourg holding company is required to pay i) a 1% Capital Registration Duty, paid at the time of Luxembourg company formation and ii) annual capital tax of 0.2% per year.

Luxembourg is an EU member with a stable government, economy and legal system and therefore Luxembourg company formation portrays a positive image to clients, suppliers and venture capitalists. Luxembourg is positively ranked as the world's 15th-freest economy, and scores at 90% in terms of investment freedom and capital flows according to the Heritage Foundation's 2008 Index of Economic Freedom, a measure of freedom enjoyed in  business, trade, monetary, financial, investment and labour markets. Furthermore, Luxembourg is positively ranked as the worlds 12th least corrupt country in the 2007 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians.

Luxembourg company formation allows a Soparfi (Societe de participation financiere) to register for EU value added tax (VAT) and access double taxation treaties with countries including China, France, Germany, Singapore, the US and the UK.

Following Luxembourg company formation, Healy Consultants can open a corporate bank account with one of the world's leading retail banks, including HSBC, Standard Chartered and Citibank.

In its 2008 World Competitiveness Yearbook, the Switzerland-based IMD positively ranks Luxembourg as the world’s 5th most competitive economy. The ranking takes into account factors including economic performance, government efficiency, business efficiency and infrastructure.

Luxembourg company formation is expensive, with high government fees and a requirement for the authorised minimum capital of Euro 12,500 (US$18,400) to be deposited in a Luxembourg bank prior to incorporation.

A Luxembourg Soparfi pays 30% corporation tax on all profits. Five per cent of a company's net profits must be paid into a legal reserve until 10% of the issued capital is reached. Following Luxembourg company formation, financial statements and an annual return must be submitted to the Luxembourg government.

A minimum of two shareholders and three directors is required for Luxembourg company formation. Directors need not be resident in Luxembourg. However, shareholders' and directors' details are available on a public register.

Despite Luxembourg's reputation as a developed economy, Luxembourg is negatively ranked as the world's 42nd easiest place to do business in the World Bank's Doing Business 2008 Survey. The survey measures factors including business start up procedures, time, cost and minimum capital required to start a business. It also ranks as the world's 25th most competitive economy in the World Bank's Global Competitiveness Report 2007-2008.

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