Singapore VCC insights

Singapore vs Luxembourg Family Office: SPF and RAIF Against the VCC and 13O

By VCC Editorial Team · Published 15 October 2026 · Updated 16 October 2026

Short answer: For a European family holding a passive portfolio for itself alone, Luxembourg’s family wealth management company (SPF) is usually the simpler wrapper. A reserved alternative investment fund (RAIF) suits multi-investor or EU-facing pooling. Singapore’s variable capital company (VCC) with a 13O or 13U award fits families that want real investment staff, Asian banking and a principal base in Asia.

This article is general information only and is not legal, tax or investment advice. For matters needing legal advice, we work with a panel of experienced Singapore law firms.

The Singapore vs Luxembourg family office question is usually framed as fund against fund, but most European families are not running a fund. They hold a portfolio for their own members and want a vehicle that is cheap to run and easy to defend. This article compares the two vehicles Luxembourg built for that purpose, the société de gestion de patrimoine familial (SPF) and the RAIF, with Singapore’s family office toolkit: the VCC, the 13O and 13U tax incentives, and the MAS exemption for SFOs. Our VCC versus SICAV guide covered fund launches; this piece covers private wealth holding. We checked all sources on 15 October 2026, using official Luxembourg and Singapore texts only.

What is a Luxembourg SPF and who can use it?

An SPF is a company that may only acquire, hold, manage and realise financial assets, for investors managing private wealth. It is a holding wrapper, not an operating company or a fund.

Under article 1 of the Law of 11 May 2007, an SPF may take one of four corporate forms, including the société anonyme and société à responsabilité limitée. Its articles must state that it is subject to the law. Article 3 limits its investors to three groups:

• natural persons managing their private wealth
• wealth-management entities acting exclusively for the private wealth of natural persons
• intermediaries acting for either of those groups

Each investor must confirm this status in writing. An SPF may not offer its securities to the public or list them.

The Luxembourg direct tax administration summarises the limits that matter for planning:

• An SPF may hold a shareholding only if it does not interfere in the management of that company.
• It may not grant interest-bearing loans, even to companies it holds.
• It may not hold real estate directly. Since 1 July 2021 it also may not hold real estate through partnerships or common funds, although it may still do so through capital companies.

Families with an actively run business, direct property or a lending book will find the SPF too narrow.

How is an SPF taxed compared with a Singapore 13O fund?

An SPF pays almost no Luxembourg tax and gets almost no treaty benefit. A 13O or 13U fund gets a Singapore tax exemption, but only if it meets ongoing substance and spending conditions.

Article 4 of the 2007 Law exempts the SPF from income tax, municipal business tax and net wealth tax. Instead it pays an annual subscription tax (taxe d’abonnement) of 0.25%. The base is its paid-up share capital, plus share premium and any debt above eight times capital and premium. Guichet.lu, the government portal, gives a minimum of EUR 1,000 and a maximum of EUR 125,000 a year, declared and paid quarterly.

Circular 823 of 27 December 2024 from the Registration Duties, Estates and VAT Authority (AED) confirms the increase in the minimum from EUR 100 to EUR 1,000 and dates it to 1 January 2025. As an illustration, EUR 20 million of paid-up capital produces EUR 50,000 a year. Above EUR 50 million of capital the cap of EUR 125,000 applies.

The price of the exemption is isolation from the wider tax system:

• The SPF is excluded from the EU Parent-Subsidiary Directive.
• Its dividends are paid without Luxembourg withholding tax.
• Resident individual shareholders cannot use the 50% dividend exemption on SPF dividends.
• Gains made by non-resident individuals on selling SPF shares are not treated as Luxembourg-source income.

In Singapore, a VCC is taxed at corporate rates, and each sub-fund of an umbrella VCC is taxed separately. Relief comes from the 13O or 13U award. The MAS scheme page sets the conditions:

• At least S$20 million (13O) or S$50 million (13U) in designated investments, maintained throughout the award.
• Two or three investment professionals, at least one from outside the family. They must be Singapore tax residents earning more than S$3,500 a month.
• Tiered spending of at least S$200,000 of local business spending.
• A capital deployment requirement.
• A private banking account with a MAS-licensed financial institution.

Separately, the Inland Revenue Authority of Singapore (IRAS) confirms in its e-Tax Guide of 6 June 2025 that Singapore does not tax capital gains. The exception is the section 10L regime for foreign asset disposals on or after 1 January 2024.

When does a RAIF make more sense than an SPF for a family?

A RAIF makes sense when the family wants a fund that is run by an authorised AIFM and can admit outside investors, such as a co-investment platform rather than a holding company.

Under the Law of 23 July 2016, a RAIF must qualify as an alternative investment fund and reserve its securities to well-informed investors. These are institutional or professional investors, or others who confirm the status in writing and either invest at least EUR 100,000 or obtain a qualifying assessment from a bank, investment firm or authorised manager. The original 2016 text said EUR 125,000. The consolidated text published by the Commission de Surveillance du Secteur Financier (CSSF), which lists amendments including the Law of 21 July 2023, now shows EUR 100,000.

The operating requirements are substantial:

• The RAIF must be managed by an authorised external AIFM.
• It must appoint a Luxembourg depositary and keep its central administration in Luxembourg.
• It must reach EUR 1,250,000 of capital within 24 months.
• Its accounts must be audited by a réviseur d’entreprises agréé (approved statutory auditor).

Formation is by notarial deed within 5 business days. The fund must be entered on a list kept by the trade and companies register within 20 business days.

Fiscally, the RAIF pays a 0.01% subscription tax on net assets and, apart from registration duties and VAT, no other Luxembourg tax. Its distributions carry no withholding tax and are not taxable in the hands of non-residents. A corporate RAIF limited to risk capital can opt instead for the article 48 regime, under which income from securities and gains on them are not taxable.

A RAIF is not supervised by any Luxembourg authority, and its offering document must say so on the cover. Supervisory comfort comes from the manager. The nearest Singapore equivalent is an umbrella VCC with a licensed fund manager.

Singapore vs Luxembourg family office: how do the structures compare side by side?

The table sets the three usual choices side by side.

Point	Luxembourg SPF	Luxembourg RAIF	Singapore VCC with 13O/13U
Legal basis	Law of 11 May 2007, as amended	Law of 23 July 2016, as amended	Variable Capital Companies Act 2018; Income Tax Act 1947 ss 13O, 13U
Who may invest	Private-wealth individuals, their wealth entities and intermediaries	Well-informed investors (EUR 100,000 route or assessment)	No statutory investor class; at least one shareholder
Permitted assets	Financial assets only; no direct real estate; no interest-bearing loans	Collective investment with risk-spreading (unless article 48 risk capital)	Designated investments for incentive purposes
Manager	None required	Authorised external AIFM	A fund manager must be appointed (ACRA)
Recurring entity tax	0.25% subscription tax, EUR 1,000 to EUR 125,000	0.01% subscription tax on net assets	Corporate rates, with exemption under an approved 13O/13U award
Regulator	Tax supervision by the AED	Not supervised; AIFM supervised	SFO class exemption (MAS); VCC registered with ACRA
Substance test for tax status	Eligibility and activity limits, certified annually	Activity limits; 0.2% fine if breached	Investment professionals, local spending and capital deployment

What licensing and substance does each route require?

The SPF needs no licence, but the AED actively polices its status. A Singapore SFO is exempt from licensing, but it must notify MAS, and a 13O award adds a genuine staffing test.

Each year by 31 July, the SPF’s domiciliation agent, or failing that an approved auditor or chartered accountant, must certify to the AED that the SPF meets the investor eligibility rules. The AED’s Circular 823 describes the enforcement regime introduced by the Law of 20 December 2024:

• Fines of up to half the annual subscription tax, or up to EUR 10,000, for filing failures or omitting “SPF” from the name.
• Fines of up to EUR 250,000 for breaching the core conditions.
• Permanent withdrawal of SPF status if a breach is not cured within six months. Withdrawal can reach back to the later of the first breach or 1 January of the fourth year before the decision.

In Singapore, the MAS media release describes the revised framework as structure-agnostic. A qualifying SFO notifies MAS, keeps an account with a MAS-licensed bank and files a short annual return showing its assets under management (AUM) and its bank. Our note on minimum AUM explains what the exemption does and does not require on asset size. The 13O and 13U conditions then require local investment staff and spending. That costs money, but it also evidences substance.

How do banking, trusts and succession differ?

Banking requirements are stricter on the regulated vehicles. On succession, Luxembourg registers trusts and fiducies centrally, while Singapore has no estate duty and lets families set up a private trust company.

A RAIF must use a Luxembourg-based depositary, normally a credit institution or investment firm. The 2007 SPF Law contains no depositary requirement, so the family chooses its own bank. In Singapore, both the SFO exemption and a 13O award depend on a MAS-licensed bank or financial institution.

Luxembourg runs a register of fiducies and trusts under the Law of 10 July 2020, kept by the AED. Trustees must record beneficial ownership information there and update it within one month of any change. Singapore removed estate duty for deaths on or after 15 February 2008 (see does Singapore have estate tax). Families can hold a VCC through a trust run by their own private trust company. We did not open official Luxembourg sources on inheritance tax, so this article draws no conclusion on it.

What does the Singapore-Luxembourg tax treaty change?

The treaty matters when wealth crosses the two hubs, such as a Singapore VCC holding Luxembourg companies. It cannot be assumed to cover an SPF that pays no income tax.

The treaty text published by IRAS shows the following:

• It was concluded on 9 October 2013, entered into force on 28 December 2015 and took effect from 1 January 2016.
• On the Luxembourg side it covers capital tax (net wealth tax) as well as income taxes.
• Under article 10, dividends paid to a resident of the other state who is the beneficial owner are taxable only in that other state.
• The protocol treats a collective investment vehicle as resident if it is liable to tax there, including one that is exempt only because it meets the conditions for exemption.
• The Multilateral Instrument (MLI) changes, in force from 1 August 2019, add a principal purpose test (article 27A). This denies treaty benefits where obtaining them was one of the principal purposes of an arrangement.

Put real people and decisions behind any vehicle that claims treaty relief.

Which route fits which family?

Decide where and by whom investment decisions will be made; the vehicle follows.

1. Map the assets. Passive securities suit an SPF; direct property, lending or active control do not.
2. Decide who will invest. Outside co-investors point to a RAIF or an umbrella VCC.
3. Locate the principals and staff. If portfolio managers will sit in Asia, 13O or 13U substance is achievable. Our Singapore vs Switzerland comparison applies the same test to Zurich and Geneva.
4. Test the residence plan. For principals relocating, review Singapore’s Global Investor Programme and pass options through our sister site, Singapore Employment Agency. We did not review Luxembourg residence rules for this article.
5. Model running cost: the SPF’s 0.25% (capped at EUR 125,000), the RAIF’s 0.01% plus AIFM, depositary and audit fees, and the 13O’s S$200,000 minimum local spending plus salaries.
6. Check treaty and reporting exposure before any assets are moved, including the principal purpose test and both registers of beneficial owners.

Frequently asked questions

Can a Luxembourg SPF hold shares in a Singapore VCC?

Possibly. VCC shares would ordinarily be securities, but confirm they fall within the definition of financial assets that the SPF Law borrows from Luxembourg’s 2005 financial collateral law. The SPF must also not interfere in the VCC’s management, and its own investors must be private-wealth investors. Get advice on how Singapore’s 13O conditions view an SPF shareholder.

Is a RAIF regulated by the CSSF?

No. The RAIF itself is not supervised by a Luxembourg authority, and its offering document must say so on the cover. Its authorised AIFM is supervised under the AIFM framework.

What is the cheapest structure to run?

A RAIF’s 0.01% tax is lower than an SPF’s 0.25%, but a RAIF also needs an AIFM, a depositary and an audit. A 13O fund carries salaries and at least S$200,000 of local spending. Portfolio size decides.

Does the Singapore SFO class exemption replace the 13O application?

No. The class exemption deals with licensing under the Securities and Futures Act 2001. The 13O and 13U incentives are separate tax awards with their own conditions.

Sources

• Legilux: Law of 11 May 2007 on the SPF
• Guichet.lu: Subscription tax (taxe d’abonnement), updated 27 July 2026
• CSSF: Law of 23 July 2016 on reserved alternative investment funds (consolidated)
• ACRA: VCC features, eligibility and requirements
• MAS: Fund tax incentive scheme for family offices

Raffles Corporate Services helps European families and their advisers set up Singapore VCCs and family offices and run the compliance that follows. For legal and tax advice, we work with our panel of Singapore law firms. Email hello@rafflescorporateservices.com or Call/SMS/WhatsApp +65 8501 7133, or visit Raffles Corporate Services.

Last reviewed: 15 October 2026. The Editorial Team, Variable Capital Companies Act.

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