Establishing frameworks for investing in intellectual property.
The Luxembourg tax regime aims to encourage intellectual property (IP) companies to invest in intellectual property and research and development (R&D) through an effective tax rate on IP income of around 5%.
The regime is applicable to IP rights including patents, trademarks, models, design and authors’ copyright related to software. To qualify, the assets must have been acquired or created after 31 December 2007.
Why Luxembourg?
Intellectual property and royalty management has become a Luxembourg specialty. Luxembourg is an extremely favourable legal and fiscal environment for artists, writers, companies, inventors and engineers to domicile their royalty income. The country has an attractive intellectual property rights tax regime which provides:
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Tax exemption on 80% of the net profit derived from the royalties received by a Luxembourg IP company on its IP rights;
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Tax exemption on 80% of the net capital gain realised upon disposal of these IP rights by a Luxembourg IP company;
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100% exemption from wealth tax on the IP rights value held by the Luxembourg IP company;
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If the company has developed the IP rights itself it is eligible for a deduction equal to 80% of declared income on the IP rights used by the company
The Luxembourg IP company
A Luxembourg IP company can be set up in any form existing under Luxembourg company law. Investors, promoters, authors and IP developers often choose the S.à r.l or the S.A. (with a minimum capital requirement €12,000 or €30,000). Creatrust provides the guidance and knowledge to help investors take full advantage of the favourable legal, taxation and regulatory frameworks available in the Grand Duchy.
Contacts us for more information on setting up an IP company or structure to invest in intellectual property.
Regulated or
Unregulated 