What is a SOPARFI?
SOPARFI (SOciété de PARticipations FInanciéres) is the most common vehicle dedicated to holding and financing activities in Luxembourg. The company may also carry out other activites, provided they are provided for in the bylaws and a business license is obtained if required. Any undertaking or private person can be eligible as an investor.
A SOPARFI is a fully taxable unregulated company, not subject to any supervisory authority. It does not require authorisation unless quoted and/or commercial activities are carried out.
Other source:
https://www.offshorecompany.com/company/luxembourg-soparfi/
Some Q&A
Why do we need a Soparfi? If you have another SPV, we can also take over yours. However, there is a risk that the paying agent will refuse to launch the note. My cooperation partner relies on the Soparfi format for this constellation because it is certainly accepted by the paying agent and the costs for setup and maintenance are very low.
Will the Sopari be taxed? Yes, but our partner mentioned that the tax is levelled out as there are incoming income and outgoing investment management expenses and interest and capital payments hence the actual income in the SOPARFI will be zero.
Can the Soparfi grant loans? Yes.
Why can’t we rotate loans on the note? The Private Placement Memorandum (PPM) can embed predefined single or group investments and is set only once (static). Having such a SPV in between is the only solution if you want to have an active rotation in the investments, as we cannot adjust the PPM reflected by the note. By having a Soparfi and being the director of the company, you can make all your loans you want and the Soparfi has a financing and pledge agreement with the Compartment in Luxembourg behind.