Luxembourg capitalisation contract simulator: savings, transfer and security

Simulate your Luxembourg capitalisation contract

Select your country of tax residence: the projection will apply its exit tax (Luxembourg is neutral). Your data is neither stored nor transmitted.

Why combine capitalization and Luxembourg?

Most executives who accumulate cash in a holding company leave it sitting in a current account or invest it in a few in-house products offered by their bank. This represents a considerable opportunity cost and an exposure to counterparty risk that is rarely measured. The Luxembourg capitalization contract addresses precisely this blind spot by combining two components that are usually separate.

In terms of capitalization: transferability through gift, while retaining tax advantages, and the possibility of ownership by a legal entity subject to corporate tax. In Luxembourg: protection of assets (your segregated assets off the insurer's balance sheet, Super Privilege with no limit) and a much broader investment universe than the French offering — dedicated funds, individual securities, private equity, multi-currency management.

The result is the preferred tool for family holding companies that want to invest significant cash in diversified and secure assets, while preparing for the transfer of the holding company's shares—and therefore, indirectly, the contract—to the next generation. It's a structuring mechanism, not a simple investment.

The 3 levers reserved for assets structured as companies

Lever 1: Place the holding company's cash reserves in the insurer's balance sheet without diluting them.

A company subject to corporate income tax (CIT) – holding company, SCI subject to CIT – cannot take out assurance-vie policies, but can hold a capitalization contract. In the Luxembourg version, surplus cash is invested in dedicated funds and individual securities. while remaining legally separate from the insurer's balance sheet thanks to the Security Triangle. For a manager who has sold their company or accumulated cash, it is the combination of real diversification and unlimited protection, whereas the French guarantee is limited to €70,000.

Lever 2: Transfer the holding company's shares and the contract with

The Luxembourg capitalisation contract is part of a indirect transmission strategy By transferring the holding company's shares (in full ownership or through a division of ownership rights) to the next generation, you also indirectly transfer the contract they hold. The interaction with the parent-subsidiary regime, the contribution-sale (Article 150-0 B ter), and the gift of shares is tailored to each situation. This is precisely the area where wealth management engineering creates the most value—and where standard bank distribution is absent.

Lever 3: The investment universe and the multi-currency dimension

The Luxembourg contract provides access to investment vehicles unavailable in French offerings: dedicated internal funds managed by your chosen asset manager, specialized insurance funds, individual securities, direct bonds, private equity, and multi-currency management. For a holding company with international operations or investments, the multi-currency capability neutralizes exchange rate risk, and the backed Lombard loan allows for the generation of liquidity without divestment or triggering redemptions. This flexibility is unavailable with any traditional cash management product.

Case study: Jean-Marc, 59 years old, a manager who sold his company, a holding company in Luxembourg

Jean-Marc sold his company and placed €1,200,000 in cash in his family holding company subject to corporate income tax. Rather than leaving it idle, he took out a Luxembourg capitalization contract held by the holding company, invested in dedicated multi-currency funds at a net return of 4.5%, with a view to its gradual transfer to his three children. Here is the projection:

Cash that was sitting idle in a current account—exposed to inflation and counterparty risk—becomes a diversified asset, protected without limit, and part of a wealth transfer strategy. The projected capitalization is only illustrative, but the potential difference compared to inert cash is fundamental.

By gradually transferring the bare ownership of his holding company's shares to his three children, Jean-Marc indirectly transfers the contract at a reduced value, as determined by the usufruct scale, while retaining control and income. This is a typical structure—holding company, Luxembourg capitalization, and division of ownership rights—which requires careful planning and should be developed with expert advice.

The top building block of a holding company strategy

This simulator applies French tax rules for a redemption after 8 years (Luxembourg being tax-neutral) and provides an approximate capital value. However, a Luxembourg capitalization contract is more than just these figures: it only makes sense when integrated into a holding company structure, combined with the parent-subsidiary regime, the contribution-sale mechanism (Article 150-0 B ter), and the gift of securities. It is a building block of wealth management engineering, not an off-the-shelf product.

Balmont Conseil is an objective wealth management firm, a member of ANACOFI, with no capital ties to any bank. This objectivity allows us to select the Luxembourg company and investment vehicles across the entire market, and to structure the holding company/contract/transfer process solely in your best interest. Let's make an appointment to structure the investment of your company's cash reserves.

Frequently Asked Questions

Why house a Luxembourg capitalisation contract in a holding company?

Because a company subject to corporate income tax cannot hold assurance-vie policies, but it can hold a capitalization contract. The Luxembourg version adds unlimited protection (Triangle of Security, Super Privilege) and a broader investment universe (dedicated funds, individual securities, private equity, multi-currency). For an executive who has sold their company or accumulated cash in a holding company, this is a way to put that cash to work in a diversified and secure manner, rather than letting it sit idle in a current account.

How is this contract, held by a company, transferred?

The transmission takes place indirectly, via the holding company's shares. By gifting all or part of the company's shares (outright or through a split ownership structure of bare ownership and usufruct) to your children, you also transfer the contract held by the holding company to them. The usufruct tax scale reduces the taxable base according to your age, and the contract's tax seniority is preserved. The interaction with the parent-subsidiary regime and the contribution-sale (Article 150-0 B ter) is tailored to each situation.

Is the taxation different from the French version?

Luxembourg maintains tax neutrality: it does not levy any specific taxes. Therefore, for a French tax resident entity, French taxation applies—specifically, the tax regime applicable to capitalization contracts held by a legal entity subject to corporate income tax, namely a flat annual tax levied on a theoretical basis, adjusted upon redemption. The Luxembourg version offers no inherent tax advantage: its strength lies in its unlimited legal security and investment universe, not its tax treatment.

At what price point does this solution become relevant?

Like Luxembourg assurance-vie, a Luxembourg capitalization contract becomes worthwhile starting at around €250,000, and even more so above that. It is aimed at asset holding companies and executives with significant corporate cash reserves to diversify and secure. Below this threshold, a French open-architecture capitalization contract generally covers the need without the entry fee and costs of a Luxembourg structure.

How does Balmont Conseil differ from a bank advisor in this structuring process?

Balmont Conseil is an objective wealth management firm, a member of ANACOFI, with no capital ties to any bank. Structuring a holding company's cash flow through a Luxembourg capitalization contract—with parent-subsidiary relationships, contributions, transfers, and gifts of securities—falls under wealth engineering, not product distribution. A bank advisor would not offer this type of structure. Our objectivity allows us to select the company and investment vehicles across the entire market and build a structure that serves only your best interests.