PROPERTY INVESTMENT COMPANY IN LUXEMBOURG (LUXEMBOURG SCI)
Establishing a Luxembourg SCI
A Luxembourg property investment company can be established in the following ways:
- through private deed
- though a notary.
The formation of an SCI must also be published in section C of the Memorial and registered at the Luxembourg Trade Registry. A Luxembourg property investment company has moral personality.
There is no minimum share capital established by law for a Luxembourg SCI. Associates can make contributions in cash, in kind and in sweat equity.
The associates are jointly and severally responsible for debts pertaining to a property investment company.
The law confers the management of an SCI to an administrator ("administrateur"), yet in most articles of incorporation for a property investment company, the manager is incorrectly labelled as a 'gérant.'
Taxation for a Luxembourg property investment company
In the tax regime, a Luxembourg property investment company is considered to be a 'transparent' company, that is to say that it is never taxed on its own, but it is rather the shareholders who are taxed (taxable income is determined at the corporate level, then is broken down to each shareholder and each shareholder is taxed).
A Luxembourg property investment company or SCI offers a practical and safe vehicle for real estate investments. However, when planning international real estate investments (notably real estate investments in France), investors often prefer a limited liability real estate company.