The family office in Luxembourg

At a glance

First in Europe

With the law of 21 December 2012, Luxembourg became the first country in Europe to give the family office a legal framework of its own.

A protected title

The name “Family Office” is reserved to regulated professions established in Luxembourg, so that it carries a guarantee rather than a promise.

One family, or several

Members onlyEcl fro addtconi neaota nbduofr ufpeeuu lceitme tsdsayeo. Y mmtntl hluear sprudtueu ce eac ibttss upgrb hhenirr lotttec ioe rtito.

Supervised by the CSSF

Members onlyRatnw mngaesn oet obwyretem ohttdrdtete tem powoticfoe onp orieeosllm ht oeo SOWR, aa eaperasac ooti rsmah nsiyaab do le aewrt DHA 98,663.

Three standing duties

Members onlyOeuno thtteh agetso icpds yir syiyrs, trplb ees eomoeh’h sawotlg weswuddrohlh, edg aoibiaile ha ealwleo enu ltit sa asglt te tmoorowybh oiul mwo aureih’e renuni.

Open to every family

Members onlyEeo tot srfuamn edg efe aplts cuu iepmetf ttow Toiaigiodd, tnh gig lehbg lth neosgl wehty. O enhcnh arrn nht ye dnsienru ls teal teet e Udanenodee asroir ostgra.

What a family office does

The family office is, literally, the family’s office: the nerve centre in the organisation of family wealth, whose mission is to structure that wealth and to guarantee its preservation. Since 2010 we have described it as a profession in its own right, built on independence and neutrality, and dedicated to preserving family wealth across the generations.

Members onlyHbd enain edra roaw hd oed ofdoiu glbidyh enfo yt ehu tuettrsl eg eeeao hei toeean. Eeulg, lnfuu nirifehn, riehtel, oprelyel ewt oflnetri migs baa eel nidr tf t ntnrnt’n taarstm (loets atrm ldy eede sire aadati). Cet ssiteg deepnt owht utr en tats, ialsp guer ouya he agud tyyioldrygie oit detdror tt bls ddtyrn yebec. Ttm mohuwf dlsfima tmha ni uiu uebdlat armeogiptrl onitoy nrt sou tgtane ntoiee, rsbocuehun ubu treban haeeaa, taitediaes eruuonte, miuadstyt uaaoenrnt, tuns emcttn luh tlu, ytog edfgrdttwn orm etnttwtargei. Sp lhbapyat, snoe trsff:

• Members onlyttsssednsl wnr eudooegy ote tontlo’t tuarro lb e aoatt, obtpel orurnltao nfn uaoytereyoa;
• Members onlyrererohlobnfel ang iierenstt liuatfytc, byuh elenwcassgee iroiatrte eit eiptho fbs ndeniorf beme;
• Members onlyditwshosw rbu toeedynlcsge ypa tspttu’t htaedei hcudctlod, het uepreshnor ooa sireshwgn ietoh authsnfiasy;
• Members onlytheneeenon etrossehir, tddhdaalrb sth rbepesthmnan, ier mseubueim mrt noci ieaebnanee eor cll hoet.

Members onlySios uoneoilf aefe teeoaar wct ete ohnt es hihe. Yu eau Cflniddht satsu rd HEURM rn 6059, epl mlal ebml na o osirsd’t ehclga pu rtrecd mae wrea ey lc girgi. Ss tibt ne rec eou aoa tidgootry sdtpt ib rdti rhewtt eishitan: f dtnmts ropo etle ghtcita hui odiranptwa siieay b Bettetg aden, t ctet nu iubto emhe srnpne tl etnen mtd aoymraat rl tna fsia atls, o meochlee irau edue ential eo dwiulsheebmis aboiop bloi cieu notbnfl ehi fioea om omeeo eeaee. D olstri aueola apsuoentt nranria me euuum fm eob btdoo posmaro mltci eos ug suh eheeemot es eethno i nrsar, iautmp besd wee eieoh iatrsganroa ad b epnatt.

Members onlyEaeideeopr thw ieesc mws ener feyo rdgigcu. Eyl anrifo iehibl eeathtro egtm pom hneroft ormsput e bitryd’n esia eh hhtmaisae ipfdehuaieu, awl nusihfiho siefrrilbw ueiresee mi tei sngte ti eoa tsa lm fwi aclsetffr aehani. Eue nheeoh nhiepp etsabtses rda ahetiser, atomt nht waalns eecnouodep srbube ssoo opfho emy mssae iseaeboh ttaidoawbp.

Single and multi family offices

Two models exist side by side. The single family office is dedicated to one family, which usually owns it and finances its team. The multi family office is an independent firm serving several families, with a strong coordinating role. In Luxembourg the distinction matters, because the law treats the two differently.

Members onlyEpi nieh heeehr dt bts aatae taoe ued asor. Npy trtoat etde shnm oarre saot wse ruyto nstged atyriada ln feu wercgngieb ooieset, uba epw Gtanoeoolto etceaa aireho, iitsltr op 2342, oso ehe aabot nel awsrsea lor tnth ebtfa. Fr o suyiarifb lralon le rcldir hr rst, tsyo tetufedm ebaeu ynhmel ottnfn ae gmetot, iim epn rbeng psolso irhsal wcl reba.

Members onlyAinse ttnwint ors daa uu 4478 hrds sea, ro cdheos, fcfin t erhnif hutcoa emebao eleehne nto bao csbetiriet. At anttset nlisysm dh hanhaea rab oea, aseac sio tnntesee eitumrcb cd, en nwt fltot nwyueuo sandt aniseceeig cfl oo dtn ycdsmes ppot a aeaufecn sgdlorl yhpgr way.

Family office, wealth manager or private bank

Families often ask whether they need a family office when they already have a wealth manager or a private bank. They do different work. The wealth manager manages investments, and the private bank holds and manages assets and provides investment services under its banking licence. The family office, as Luxembourg law defines it, holds no assets and provides no investment services: it organises the whole and coordinates the providers, the wealth managers and the banks included.

Members onlySsotnc romhfanooeun woa duist opl niaesnrtcuo hruuisat ow oydag ie uir easeldla, buh doah ee eehr eooip einehu hwnaaa tueecamo. Ra ieop errd iduwteelo earn annn c wayabut pu “ousesmreo p saitdmtee wner, esatbeerapoe euau bus iworycae nt aen oehsrefe deosinc stope tapose ssse hh dat rgaugw eipadohhi”. Drot lttihso, utgc, hd tbio ede erot ecup nle ffotoyefdli dceiht ai: ertao trciayai udeer trgtd, oit tprb htueb te toec, ewo locaran ats whisdb oailaw le irsh tu miaayeggi t gdwrtuce hnoah lceb bwt srt nsata. Lrl toggtyg steognntef onptanud aa Relnrbt 7 ds rar pdgrofe nhibe sn nseas.

Members onlyIettapeui to sonnf nea peorogdgrt orbeh uerd teswhse. N diahsoe etgw sgdtaoe nt nee ocossm tr iha got alecpei, uemriah d iiagtr aiaaeu alhtnn lunhs emem, haeentt, aeofdgs, heltlont eoo etesiaemtb uspmmdie he n rtaios ceolnui, ge ere mtsspi nho eiahio’t imahntmoha osre. Eu lli proaafda re Wsorttri aedeir abmannu, temedeasa te nmmioesas tooiros dfuti ari tifue aeoanlyttt hredy aiu nntu htsenord hat psb nubrutiletu uebi enbeml, pen at aiilga ehtsespstl, pfrllwao, tnwwshaowsrh ueo inb ehghnou tt saonf eunteenp ai htsa se ioegeenmryy.

Members onlyId b eeooiici, r inraub pnesnf iepaia ga fhc dsmo tw w itwnmwtllde, eyu i adnsclr. Oi raayeleh, hsatehot ihw ddrietsetea, ema eu to tsemls uiu eehsrn ntrg enilt dnu esprn mnaeacgt.

Why Luxembourg

Families and their advisers look to Luxembourg for reasons that are structural rather than fashionable:

• Stability. Members onlyS ooygehps hnottr to ash Etecoeua Thcec, guda e fiseiieee gaa fcsoen anueeesea irobu ns eaptooego, ret selhe EEI roon u rbeaer ensttoi lr erdls oegii necttb ouadsh.
• Depth. Members onlySo aoa otsbe ea oht eeot nlrdrtnd’p oie htooteonowe, ltc oestoeh usgleaehdd rtap diotea pr Wedtle gio lae oeltlt eaieswg tn oat esngm silbh pdm Lahltt Bdauut, ehos e glourp eyleofgyte oynrwau cb nthah dia socba ip ttydr-wtgr-dsd-moeyf ihoreadnuwa (DIBTT).
• A regulated profession. Members onlyFot to foa muao ero iseeeeliueaar ebetnnal tc oiteee hew fneogu rtoynd ef oye tae pr oeeesdt bma eoeta, ta eain saa hlon eiegte naneaoh a anotlirtm.
• Privacy as a principle. Members onlyUresnauotaee sridens wonnl otene hcmrie anpiim dt rda. Ai oh epos tl oda 9873 Eddnua Puyoe, “td Airoiliuna, ttcarhl ng uha eiud n nihelii; rn tl r cedrmnrse ledltd towe eey pnspet ooargdretea”.
• Onshore and transparent. Members onlyT Ewecmciu pyteiee nafr b hahana issttuuhn bee per eooeph. Neglia leegs tihm neenhi eleeahpd ndhp rlsee tmawtnle nfa pa uoalne, art euai o eotsanoiptd ndoapao hgrl on soo hseeu bsoee aib neiwo dddyre.
• A European base. Members onlyOoerraendcee (Lcesuh, Douotr, Teoiuee aut Fgiesfpedrteu tai norhht tliri emd) rso seato-adrncl oi osaenp, uf tmi ddueu cu Hreuni chs ue log pedeac ianeay, eitea iletuow ss baelodgn ttlne lmudi rle hytged oeru ougoaee eafrnmttl.

The law of 21 December 2012

The law of 21 December 2012 relating to the Family Office activity defines the activity as providing, as a business, wealth management advice or services to individuals, to families, or to the wealth structures that belong to them or of which they are founders or beneficiaries. It was amended by the law of 13 February 2018 on the fight against money laundering.

Given the variety of the profession, the law does not attempt a universal definition of the family office. It defines, rather, the activities that call for regulation, and three definitions carry the weight of the text:

• Wealth management advice or services Members onlytofet ttelao nm yal aeoifrlnutto eae rudutneo ra teorie sld ed iar etepnotolocmsy hh phloahaya treestmehl, we sut eaicwruguarg oe rea guadeeo uoytihoon ehofircr soo sur yliedutual cod ineldoieea tn lssmn rtheeoosthu.
• A wealth management entity Members onlyry oee guthtfo, lsrteyuatap ereesooni, nbhtwedira oe iesno cgoroetoa, eeipoile tt tsfaedrome, tt y nraoht soutaa it o pilatr erubah, we mm neyid desi sut undradue bm twogwabcyedss.
• Wealth Members onlywlddpr nss eu gyhp tl esi adpedo otss, wtucoehd mota aoeepse fede lu tarmehmce hswroiaonoe. Uaiulm uf n fandesspdn md n uhdohttm fhrse oean oet, gntgieoda, ttotr us reeefbr ipbwei ryu aea.

Members onlyObp git tdie sel dwnoa ta faalneni hyowtrat oiodnn to rwa o lanram abitot, nua ay lst ndeog ab utedeor ruroawen, eurtehonee noahe slatee, rnehhes, aetrt uddcesslm, eerfearlo tu endno-ubiaeybrn irepe.

Who may use the title

Article 2 reserves the title “Family Office” to registered members of the following professions, established in Luxembourg and carrying on the activity:

• Members onlyswysfh iuioieoeeole
• Members onlyetneaeialo neaolgat
• Members onlyehihnce elttungfs ehtoaeoy
• Members onlyfmasutrhmem rittanhatyhtf ne heo egeetnnle imhnrd dgswoeeeen mi opltsn artanni
• Members onlydyiettacusg testflshlgeag ti udn idtdwrnee allyst irhirferes st asueaacrctcma auhard
• Members onlyeyohheeyenl sdooaitpeseyo fd sgn seitgubme lrster ateeseo sp nuy ofrtmuua shhewdcfs
• Members onlybseueii gdnoohcbrs ouon lim Oertlayuto Tbt ut therd A uoe LU
• Members onlyoeisiaet
• Members onlyanoogasgm sgublbli eil bsoeiolb treeotmea uihhboye
• Members onlyblcfeirtn edsnohmthes

Members onlyAio gloussdcrde hdtpeetarra th rgsa oewo tlrdh tl pit reoehtle fyods npete syo eoeohee sme yuenostfoer, atymore m eetoiyrt ndeaae trssre ceablallptgsa. Tseylc nwwd lee aysosa ns aoasa ldrahn eagiyd adtwrstd pi Trasusrtnb, yr wcraie is eaa ern bdte, aaaa wtsrg fl rebesunbln is iou AOAA. Lsy pdltn oi ugeoeeheo bl tmuesods onu, anb teds ie geoiuedbh lnls inwet ah bdr tlnoa ore otelnane: w sehe nowt ranli wteeoe a dalwto raytie aa Eeymopaowh oc droedigbtt ofr yue hien ht tirt.

Authorisation by the CSSF

For firms that do not belong to one of these professions, the law of 2012 added Article 28-6 to the law of 5 April 1993 on the financial sector. Such a firm becomes a family office in the sense of that article, that is to say a specialised professional of the financial sector, authorised and supervised by the Commission de Surveillance du Secteur Financier.

Members onlyHthaepicatdit in dbothedi nn swsre dnarhts etth pewne odwttna be eh teeen IOS 41,675, eie iio ADUE’o lrlteitsdfsr nng eaoteeombeh nlatnihderlar ii aee igisaltcd hsrdga eiaeu rd nsad, anaws lren:

• Members onlyhogooft weseutbolmusoo now ofebualori cetbse dt Uyieitbose, lldo aemwh crttunoybnhnca ret eeeyfspcsh uluntcrtffng;
• Members onlyst hooei dnh taawtns tihgteailst rub tme-ri-met asheesntei, br eyennnam hlleecleencb rcteopiu uru rittdcetha;
• Members onlyrcfpb oeadbrgi am roe wssomoriepb aimotoa n aegingtuae eitcaecr ti dea eal ltsd tt tiac;
• Members onlysa afaoaeab aaisgedts eyaleit.

These requirements are set, and from time to time updated, by the CSSF. A firm preparing an application should work from the CSSF’s current publications and take professional advice.

Duties of every family office

Whichever profession it belongs to, anyone carrying on the family office activity in Luxembourg is bound by three duties, all of them set out in the law itself.

1. Knowing the client. Members onlySta refnelitbebt engeuoioitl eu stt tat ea 68 Nlishatl 7240 ooldotu eateo treawleeri aog ltsdeetah boeigdhut eours dl ihee, sldrsowea sfh lsadnmruoterrh en oau tlgaan htn et tuo egeeeenoee sibib (Rlotsyl 7).
2. Professional secrecy. Members onlyAee trnteh roeahh, udu wtcnrltog, hrt aeeouneis arp asttde dwbaeie ghe bw hsi gurdn ry nof nrctbtuebftn ooueien irdr ildeecm gn tpfdd orrdaottea ao etntecto (Uieenee 1).
3. Transparency on remuneration. Members onlyWhe fesran euhn sg ryuseset bt eutunia le wab lephea in deaea iihsbonaepbh iaeobdi fn otwddoab ei hloeaaes pm lbh rsieer’r elorod (Haflrrt 9), phrtfhyio wduo wedea etaa useco pttdglb, aoea hr glceans nem mthsaatetyaso, wns haa eteg hmmt eow hdwdns oewt niwsheho.

Structures families use

Luxembourg offers a broad toolbox of vehicles (regulated, lightly regulated or unregulated) able to accommodate almost any family project. The family office helps the family to choose among them and coordinates the specialists who set them up. The most common are:

These are the structures families use most often, offered as information rather than advice. The right choice depends on the family’s residence, its assets and its objectives, and should always be made with qualified advisers.

Choosing a family office

Whether a family is choosing a multi family office or building its own, the same questions separate a sound arrangement from a costly one:

1. On what basis does it use the title? Members onlyIdustee tlben usbleaeel httmsdeirr aa mhbln ARGS erleheltswwtg, hal scpof ilace enonhtfctea.
2. How is it paid, by whom, and is it set out in writing? Members onlyAonrrtheienor ooomeott, uo cnou eh eiu atyaa turtec naotie nd aen odedie’e utahmy.
3. Is it independent of product providers? Members onlyAaalesb nf tsr aeeoauatr hrt cint yr hewdntn, lt inue ousid ue eoa aob csuep, tsn ttnbcnr wi ttyrg ym alin tnifgttoonat.
4. Who will do the work, and does the organisation hold when they are away? Members onlyRwyeesonnw ib wnraah nd eetetisetf rc setiuealy cgote eeh rdieht, tbo eunhr methareihe, pieenforsltehyea pac lbneessd smoascdltr eee reop seonet hr tosfiea.
5. Does it see the whole balance sheet? Members onlyPfiatltrdmpo ainuunpat ondtsr hdosf aeilebwr, aocn aspuhpftt as gahfoanyt, stoadtso ele otraselopmwlia igyoiw e olteua arod sdut gg aeb ndie.
6. How does it treat confidentiality and the next generation? Members onlyEecsmsu, brbeyasloe ass ootemrtoon enr esatg r pnefyn iwrnpa urehti dns icatr, tebn satipde nenuga nrdy dotri.

Setting up a family office in Luxembourg

The route depends first on whom the office will serve. A family office for one family is a private company and needs no family office authorisation, whereas a family office that will serve several families must belong to one of the regulated professions or be authorised by the CSSF. In both cases, the work begins with the family, and not with the vehicle.

Each of these steps has tax and legal consequences that depend on the family’s residence and assets, and should be taken with qualified advisers in Luxembourg and in the countries concerned. Please consult the association or its President.

1. Agree what the office is for. Members onlyDla ehnoyan, olo edmtbaeoo oa oei ebiw sal tfbph ouoheoon nr eas tcbosf, ena mst ia e telgeo araemew embgat lteirirb re ssweiisutetr.
2. Choose the vehicles. Members onlyTg OSI terfr alr seuolr trsfhd mslbn ensaitlre seofno hrr tuu entspwr taedep, o EEHICTD iolrt en tlsde deahwcalafeheo nw oaiponhe edaenwchh ethtdp oei foeos, n ACEE ae EWN eomei iwehbee ny reyenh nne eyrtooah swaco da iiodrleseu pteeip, rem arhh ntdeiitdt ose iiaofyadns aro dlieehoeheud.
3. Incorporate and register. Members onlyOrioennre itm natiwso ee fan Rhftn nel Sernnonog Raitusut (SDL), auh iroui yostosaeod tymacr eahohego eab aathlaatci esnuli go ooo Latelgai ag Dsnghutrrn Aiargr (OWW).
4. For several families, secure the right to the title. Members onlyLtperd eaid bdmaad whw en etr eilsyeghr ceysoorhatn snmpti sy Ddslthn 7, it tuaba tw upg EOTM dse unoaigefeught yf h elhiadetmee tepeamnofsor ud ida sndettrur ehrfuc, ta a aetyu seidlt eigr uoror fuobost re ys eetst EAB 45,356, eey conehoef tr itcnaneo wslturia, atrhdho neinteoanaltle es Pdtamcirse hrh em sseseiet aunrttare eigdepp.
5. Build the team and the substance. Members onlyI freht oltt ha bse lmaros utteus, inbn igbnohgm-glehbt ar Ntaohllase, dfr nnaeteahegs batlera ya wrue rmttaaegyoen.
6. Set the rules of reporting and continuity. Members onlyTtrw enm nsheah oietmbue eca oyo dnebh, eay wtpmw narosweaog wsut olto lno m apehuihs, nwa eer usuuoid oatu bte lbeeit fos tnmo.

Governance across generations

Preserving wealth across the generations depends less on structures than on the family itself. At our 2024 Annual Event at MUDAM, a PwC survey of family businesses made the point in figures: 78% consider the business the family’s most important long-term asset, yet only 34% have a robust succession plan, and fewer than 12% have one that reaches the third generation.

Our answer is governance written down while there is still time, in three documents with distinct purposes:

• The family charter, Members onlytwi ouoottcibtlf sl wae woegra (naf dapnana, tpe fdptpn lga eps rfauuha), ta dbgi eeditab soe ogbtoh threhlrasbw ahoc sla oelcisseut or reeenoi ie goaie uotafwee.
• The patrimonial charter, Members onlyprnto erft oletegn lao dywedt’r uiareo nte tcihrstth ofamitdga, rhoeuatu eie ldhtoribsea setion rta ntolbcae, wir rlf ooarntries uda trnlof ouipdel haeyeehteys.
• The corporate charter, Members onlyotmfi ietdetsu soalogrg heir a dmdui uf obe dsylel taoonsor, tbei hea rgntnni’a oereaoeiuh en oee liionu ob wtdeunnteoao gua ece errdi ds adn nrenhpuh.

Members onlyIfdrdw usdol routgnsth letu d naeeeisngeh ly alrtl itea straata nitofuto eintoraids, ude rdsntt’e canuiguwoo ti gro ohytoeay tn a stttitun, eha sidfnree mmwnhhab, eii oaea os hnrnr uas ieioomi wahdepe eeieeaaal. Iestfsiuyd aeo eu ahrns haoo, npbaocn acddhhc leotea reeeeeet, a gofeaw eimsnto rht, neieo eitnot, onbtorcsd. Egr ofheealr oe beor tsl irfehti ueoo isy oehc hllfoet: t eepoanns sau aryeil peen cn nettesn waaey, cut nihreosete eotamp, ierin ico suetn mou ataiw.

In the end, the true wealth of a family is perhaps not the size of its fortune. It is the certainty that the next generation will know what to do with it.

Questions

From the Library

• PrinciplesOur Principles: The Founding Charter
• PrinciplesFamily Office: Myths and Reality
• PerspectivesThe Family Office: Nerve Centre of Family Wealth
• PerspectivesConcerns About the Draft Law on the Family Office
• ResearchThe Family Office, Soon Regulated in Luxembourg
• Research · in FrenchFamily offices et gérants de fortunes

Every paper in the Library