The family office in Luxembourg

At a glance

First in Europe

The law of 21 December 2012 made Luxembourg the first European country to give the family office activity its own legal framework.

A protected title

Only members of named regulated professions established in Luxembourg may call themselves a family office.

Multi family offices

The law applies to services provided to more than one family. A family office serving a single family is outside its scope.

CSSF authorisation

Firms outside the regulated professions need CSSF authorisation as a family office: legal persons only, with share capital of at least EUR 50,000.

Three standing duties

Anti-money laundering obligations, professional secrecy, and written disclosure of every remuneration linked to the client’s assets.

Real sanctions

Using the title or carrying on the activity unlawfully carries imprisonment of eight days to five years and a fine of EUR 1,250 to 125,000.

What a family office does

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

Its value lies less in any single service than in the overview. The family officer is the family’s central coordinator, across tax and wealth advice, governance and family policy, succession planning, fiduciary functions, real estate and art advice, risk management and philanthropy. Banks, asset managers, lawyers, notaries and insurers each see one part of a family’s affairs. The family office sees all of them, works with them in open architecture, and answers to the family alone. In practice that usually means:

• organising and planning the family’s wealth as a whole, across countries and generations;
• administrative and financial oversight, with consolidated reporting the family can actually read;
• selecting and coordinating the family’s service providers, and monitoring and assessing their performance;
• supporting governance, succession and philanthropy, and preparing the next generation for its role.

Seeing the whole also changes how risk is judged. As the association’s president wrote in AGEFI in 2026, the main risk to a family’s wealth is rarely that one index falls. It lies in how the parts interact: a market fall that reduces the collateral behind a Lombard loan, a rise in rates that weighs on bonds and property at once, a currency move that shifts an international estate. A family office reasons in terms of the whole balance sheet and its capacity to absorb a shock.

Luxembourg law draws one line clearly. The family office activity does not include holding a client’s cash or financial instruments, or providing investment services in the sense of the law on the financial sector. A family office organises and oversees; the assets themselves stay with banks and other licensed custodians.

Single and multi family offices

A single family office is dedicated to one family, which usually owns it. A multi family office is an independent firm serving several families. The distinction matters in Luxembourg, because the law treats the two differently.

The idea is far older than the name. Its modern form took shape with the great family fortunes of the nineteenth century; the Rockefeller family office, founded in 1882, is the best known. Because a dedicated office is costly to run, some families later opened theirs to others, and the multi family office was born.

Even outside the law of 2012, a single family office remains subject to company law and, where its activity requires it, to anti-money laundering rules and any licence that a specific service calls for.

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 natural persons, families, or 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.

Three definitions carry the weight of the text:

• Wealth management advice or services means advice on the organisation and planning of wealth and its administrative or financial management, or the coordination of the service providers involved and the monitoring and assessment of their performance.
• A wealth management entity is any company, contractual structure, foundation or trust belonging, directly or indirectly, to a single person or a single family, or of which they are founders or beneficiaries.
• Wealth covers all or part of the assets held, provided they include cash or financial instruments. Advice on a collection or a building alone does not bring an adviser within the law.

The law expressly does not apply to services provided within or for a single family, nor to the roles of company director, foundation board member, trustee, trust protector, fiduciary, or court-appointed agent.

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:

• credit institutions
• investment advisers
• private portfolio managers
• specialised professionals of the financial sector authorised as family offices
• specialised professionals of the financial sector authorised as domiciliation agents
• specialised professionals of the financial sector setting up and managing companies
• lawyers registered with the Luxembourg Bar on lists I and IV
• notaries
• statutory auditors and approved statutory auditors
• chartered accountants

The established professions on this list carry on the activity under their own licence and supervision, without a separate family office authorisation. Anyone else who wishes to offer family office services in Luxembourg, or to use the name, must first be authorised by the CSSF.

Authorisation by the CSSF

The law of 2012 added Article 28-6 to the law of 5 April 1993 on the financial sector. A firm carrying on the family office activity without belonging to one of the regulated professions is a family office in the sense of that article: a specialised professional of the financial sector, supervised by the Commission de Surveillance du Secteur Financier.

Authorisation may be granted only to legal persons, and only on evidence of share capital of at least EUR 50,000. The CSSF’s requirements for specialised professionals of the financial sector also apply, among them:

• central administration and registered office in Luxembourg, with sound administrative and accounting organisation;
• at least two persons responsible for day-to-day management, of adequate professional standing and experience;
• prior approval of any shareholder holding a qualifying interest of ten per cent or more;
• an approved statutory auditor.

Authorisation requirements are set and 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 set out in the law itself.

1. Anti-money laundering. The professional obligations of the law of 12 November 2004 on the fight against money laundering and terrorist financing apply in full, including knowing the client and the beneficial owner (Article 3).
2. Professional secrecy. The family office, its directors, its employees and anyone working for it are bound by the professional secrecy that applies to their profession or activity (Article 4).
3. Transparency on remuneration. The client must be informed in writing of the detail of every remuneration charged or received in relation to the client’s assets (Article 5). This includes what is received from third parties, such as rebates and retrocessions, not only what the family pays directly.

Family office or private bank

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

Credit institutions are among the professions entitled to carry on the family office activity, and some offer family office services. The association has long cautioned that such a service is “sometimes a marketing lure, particularly when the interest of the managing company comes before that of the family concerned”. What matters is the arrangement behind the name: whose interest comes first, how every party is paid, and whether the family office is free to recommend a provider other than its own group. The written disclosure required by Article 5 is the place to start.

Reporting is where the difference shows. A private bank reports on the assets in its own custody. A family office consolidates every bank, manager, holding, property and commitment into one picture, and reports to the family at the rhythm its governance sets. In the association’s research on European family offices, reporting is typically monthly while the first generation leads and less frequent for later generations, and it covers governance, trustees, philanthropy and the minutes of board meetings as well as investments.

One test sums it up. A family office worthy of the name is a facilitator, not a manager: it prepares, compares and coordinates, and it is always the family that takes the final decision.

Governance across generations

Preserving wealth across the generations depends less on structures than on the family itself. A PwC family business survey presented at the association’s 2024 Annual Event at MUDAM made the point: 78% of family businesses see the business as 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.

The association’s answer is governance written down while there is time, in three documents with different purposes:

• The family charter, the constitution of the family: its origins, values and mission, so that present and future generations know the principles to respect in every decision.
• The patrimonial charter, which asks whether the family’s assets are sustainable against inflation, taxation and exceptional income and expenses, and how management and family members communicate.
• The corporate charter, which balances everyone with a stake in the family business, from the founder’s intentions to the rights of shareholders and the place of the managers.

Behind the documents lies a distinction the association draws between affectio societatis, the family’s commitment to the business as a business, and affectio familiae, the ties of trust and support between relatives. Governance has to serve both, through regular family meetings, a family council and, where needed, mediation. The guidance the association gives its members goes one step further: a personal and family code of conduct first, and governance second, never the other way round.

Structures families use

Luxembourg offers a broad set of regulated and unregulated vehicles. A family office typically helps a family choose among them and coordinates the specialists who set them up. The most common:

This overview names structures; it is not tax, legal or investment advice. The right choice depends on the family’s residence, assets and objectives, and should be made with qualified advisers.

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. 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, not with the vehicle.

1. Agree what the office is for. Its mission, the decisions it may take and those reserved to the family, set out in a family charter before anything is incorporated.
2. Choose the vehicles. An SPF where the family only holds financial assets for its private wealth; a SOPARFI where it holds participations or finances companies within its group; a RAIF or SIF where capital is pooled and invested under an investment policy; life assurance for protection and transmission.
3. Incorporate and register. Companies are entered in the Trade and Companies Register (RCS), and every registered entity declares its beneficial owners in the Register of Beneficial Owners (RBE).
4. For several families, secure the right to the title. Either work within one of the regulated professions listed in Article 2, or apply to the CSSF for authorisation as a specialised professional of the financial sector: a legal person with share capital of at least EUR 50,000, two managers of adequate standing, central administration in Luxembourg and an approved statutory auditor.
5. Build the team and the substance. A small team at the office itself, real decision-making in Luxembourg, and specialists engaged in open architecture.
6. Set the rules of reporting and continuity. What the family receives and how often, the alert thresholds that call for a decision, and who decides when key people are away.

Each step has tax and legal consequences that depend on the family’s residence and assets. It should be taken with qualified advisers in Luxembourg and in the countries concerned.

Why Luxembourg

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

• Stability. A founding member of the European Union, rated AAA with a stable outlook by every major rating agency.
• Depth. In the words of the fund industry’s own association, the largest investment fund centre in Europe and the second largest in the world after the United States.
• A regulated profession. One of the few jurisdictions anywhere to define the family office in law and to reserve the title, so that the name itself carries a guarantee.
• Privacy as a principle. Professional secrecy binds every family office by law. In the association’s words, “in Luxembourg, privacy is not just a service; it is a principle upheld with the utmost seriousness”.
• Onshore and transparent. A European jurisdiction with a stable political and tax system, which the association has long presented as a transparent onshore hub for families resident in the European Union.
• A European base. Multilingual, cross-border by nature, and at the heart of the single market, which matters to families whose lives and assets span several countries.

Choosing a family office

Whether a family is selecting 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? Which regulated profession or which CSSF authorisation, and who supervises it.
2. How is it paid, by whom, and is that set out in writing? Including retrocessions and any other income linked to the family’s assets.
3. Is it independent of product providers? Can it recommend any bank or manager, or only its own group’s? Does it work in open architecture?
4. Who will do the work, and does the organisation hold when they are away? Continuity of people is continuity of knowledge about the family; alert thresholds, responsibilities and decision procedures should be set in advance.
5. Does it see the whole balance sheet? Consolidated reporting across every provider, and attention to liquidity, leverage and concentrations before a market tests them.
6. How does it handle confidentiality and the next generation? Secrecy, governance and succession are where a family office proves its worth over decades.

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