Tax Advisers - Deloitte

Luxembourg
estate owned by a family or the pooled assets of a limited number of natural persons. This
new instrument is called a family asset management company (FAC). The FAC will be
exempt from income tax and net wealth tax and its dividend distributions will be exempt
from Luxembourg withholding tax. As a matter of fact, it will only be subject to a yearly
subscription tax capped at €125,000. This new regime, which seems to have received the
go-ahead from the European authorities, is an attractive alternative to the 1929 holding
company regime which will be fully eliminated by December 31 2010. The regime should
be very popular with high-net-worth individuals, who sometimes even consider moving
to Luxembourg and becoming residents. The absence of estate tax on lineal heirs and low
income taxes, combined with this new FAC, are likely to win over many of them.
All this leads us to believe that the growth story of Luxembourg belongs to the future,
with many opportunities still to be seized.
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