Our services - Family Offices: Impact of the law on Family Offices in Luxembourg

• To respond to a strong market trend: over the years, the private banking sector has moved from merely providing traditional asset management services to giving broader advice on wealth.
• To enhance the attractiveness of the Luxembourg private banking sector's position: Luxembourg is the first European country to provide a legal framework for the conduct of "Family Office" activities.
• To increase customer protection: defining the “Family Office” concept and regulating the activity was urgent in the face of a growing number of isolated providers who are more or less professional and independent and have been using the term "Family Office".

The Luxembourg law on Family Offices (hereafter "the Law") does not give a general definition of the "Family Office" concept, but it rather defines the Family Office activities which must be regulated.

The activity of a Family Office within the meaning of the Law consists of providing, on a professional basis, private wealth advice or services to:

• private individuals
• families, or
• private wealth entities founded or owned by, or whose beneficial owners are, private individuals or families

The Law defines the advice and services related to private wealth as:

• the advice provided in relation to private wealth organisation, private wealth planning, administrative and financial supervision of private wealth; or
• the coordination of service providers whose involvement relates to private wealth and the supervision or assessment of their performances

Provision of investment services or activities within the meaning of the Law of 5 April 1993 on the financial sector, as amended (LFS):

• Requires an "investment firm" license.
• More generally speaking, the "Family Office" activity does not include services which are already regulated.

Holding cash or financial instruments of clients within the meaning of the LFS:

• Requires a banking license.

The Family Offices services provided:

• between family members
• for one natural person or family; or
• for wealth entities, the founder or beneficiary of which is one individual or one family

are not covered by the Law.

Regulated professionals automatically authorised to act as Family Offices (private portfolio managers, corporate domiciliation agents, professionals providing company incorporation and management services, lawyers registered in Luxembourg, notaries, accountants, auditors, investment advisors, credit institutions).

New category of financial sector professional (FSP): "Family Office"

• Capital requirement of EUR 50,000
• Legal entity which must comply with professional requirements (transparency of remuneration, KYC/AML, professional secrecy)
• Authorisation and supervision by the CSSF