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Form Intellectual Property Holding Company in Luxembourg

Forming an IP Holding Company in Luxembourg

Updated on Friday 23rd September 2016

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The domain names, patents, trademarks, models, design, copyright related to software and domain names are considered intellectual property. The Luxembourg intellectual property can be divided in two: industrial property (patents, trademarks and designs) and the copyright and the related rights. Foreign investors can register IP holding companies in Luxembourg based on intellectual property created or bought after the 31st of December 2007. If purchased, these rights must not come from an affiliated company. Also, in the first financial year of the Luxembourg IP holding company, the IP rights be registered as assets in the financial documents.

Our lawyers in Luxembourg can offer detailed information about all the conditions required by the law in order to establish an IP holding in the Grand Duchy.

Intellectual property elements in Luxembourg

The industrial property is represented by patents (which protects an invention or an improvement of a product or a process, a product or a process providing a new solution to a particular technical problem or a new use for something; the marks (refers to the identity of the product or service and which can be graphic signs for distinguishing goods or services of one undertaking from those of its competitors, a word mark, a figurative mark or a mark combining these two aspects); and the drawing or model for the appearance and aesthetics of a product (the shape, configuration, texture).

Copyright and related rights apply on literary, musical or artistic works. It covers software, drawings, maps, charts, plans, photographs and films, architectural works, sculptures, sound recordings, radio and television and others. For small and medium businesses, the effective use of intellectual property rights can afford to compete with larger companies. Intellectual property offers potential for these entities in terms of legal protection, information technology and competitive advantage.

The Luxembourg government is very interested in developing new technologies and granting support to new businesses so new measures for protecting those and helping developing this sector were taken. One of these measures is the IP tax regime which is applicable to IP rights which was created after 31 December 2007.

Advantages for setting up IP holdings in Luxembourg

There are several advantages attached to the IP tax regime in Luxembourg such as:

  • -        the total exemption from the new wealth tax,
  • -       an 80% exemption from the net capital profits achieved after the release of qualifying IP,
  • -       an 80% exemption of the net positive income from using certain IP rights,
  • -       a deduction of up to 80% of the net income applicable for self-developed patents used by the applicant in their own actions.

Because of the above advantages, the foreign companies may be encouraged to open patent holding companies with the purpose of acquiring patents and their exploitation via its subsidiaries. As a rule, the holding company cannot perform any commercial or industrial activity related to the patent but can grant licenses to related or unrelated companies. The copyrights of know-how can be purchased only if are related to the patents owned by the company.

How to set up an IP holding in Luxembourg

The first step in registering an IP holding company is to draft the Articles of Incorporation which contain the general information regarding the name of the company and its headquarters, the name of the founder, the amount of the share capital and the amount of paid capital (if necessary), the value and the type of the shares, information regarding the representatives and auditors. Besides the articles of association are also required the certificate that proves that the name is available and, if necessary, the certificate that proves that the paid capital was deposit in the bank. The Articles of Incorporation are then signed in front of a Notary and publish it in the Official Gazette. Our attorneys in Luxembourg can assist with the preparation of the documents required to register the IP holding.

For complete information on establishing an IP holding, please contact our law firm in Luxembourg.



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