SIF
Practical useHedge funds, private equity fund, venture capital fund, real estate fund,
infrastructure fund,
distressed debt fund, microfinance fund,
socially responsible
investment fund,
tangible assets fund
and any other type of
alternative funds.
Applicable legislationLaw of 13 February 2007 (“SIF Law”)
Authorisation and supervision by the CSSFYes
Qualification as an AIFYes, unless exempt.
It is exempt if it does not raise capital from a number of
investors, with a
view to investing it
in accordance with a
defined investment
policy for the benefit
of those investors.
Exemption
from AIFMD
full regime
under lighter
regime (AIFMD
registration
regime)
Possible.
External
authorised
AIFM
requirement
Required in case the
entity is an AIF that
is not self-managed
and above the AIFMD
threshold.
Eligible investorsWell-informed investors
Eligible assetsUnrestricted.
Risk diversification requirementsRisk diversification requirements are
defined by CSSF Circular n° 07/309.
Such requirements are less stringent
than the ones applicable to UCITS
and UCI.
In particular, a SIF is not allowed to
invest more than 30% of its net
assets in securities of the same type
of issuer.
Legal Form• FCP
• SICAV (SA, Sàrl,
SCA, SCoSA, SCS,
SCSp)
• SICAF (SA, Sàrl,
SCA, SCoSA, SCS,
SCSp)
The entities may be
open-ended or closed-ended.
Umbrella structureYes
Capital requirementsEUR 1,250,000 to be
reached no later than
12 months following
the authorisation by
the CSSF.
Required Luxembourg service providersManagement
company in case of
an FCP.
• Depositary bank
or professional of
the financial sector
providing depositary
services, subject to
conditions.
• Administrative
agent.
• Registrar and
Transfer Agent.
• Approved
statutory auditor.
Possibility of listingYes
European passportNo unless it falls under the scope of the full AIFMD regime
Net asset value (NAV) calculation and redemption policyAt least once a year for reporting
purposes.
Corporate income taxNo corporate income tax
Subscription tax• Rate: 0.01% of
the NAV annually.
• Tax exemptions:
certain money market and pension funds
or SIFs investing in
other funds which
are already subject to subscription tax.
Wealth taxNo wealth tax.
Withholding tax on dividends / interests and capital gainsNot subject to withholding tax except
if EU Savings Directive applies.
Benefit from double tax treaty network• SICAV/SICAF:
Limited to certain
double tax treaties
(see circular L.G.
-A n°61 of the tax
administration of 8
December 2017).
• FCP: see circular
L.G.-A n°61 of the tax administration of 8 December 2017.
Benefit from the EU Parent Subsidiary DirectiveNo
Thin capitalization rules (debt-to-equity ratio)No debt-to-equity ratio.

The Specialised Investment Fund is a lightly regulated and tax-efficient regulatory regime aimed mainly but not exclusively at promoters and managers of alternative investment products including hedge funds, private equity funds, real estate and infrastructure funds, but also financial advisers and private investment managers, family offices and high net worth individuals. At the end of February 2020, 1,448 SIFs with total assets under management of €602,441bn were authorised by the Luxembourg regulator, the Financial Sector Supervisory Authority (CSSF).

The SIF regime was established in 2007 to offer fund promoters and managers an onshore, regulated alternative to traditional offshore fund jurisdictions such as the Cayman Islands, British Virgin Islands and Bermuda when deciding on the jurisdiction in which to set up a fund and the type of fund vehicle to use.

The SIF regime offers broad flexibility in terms of eligible assets and investment strategy, as well as less restrictive rules on eligible investors than earlier regimes designed for institutional investors. SIFS may be created as investment companies with variable capital (SICAVs), investment companies with fixed capital (SICAFs) or contractual funds (FCPs), and take any legal form available under Luxembourg law.

The implementation of the European Union’s UCITS III directive in Luxembourg through the collective investment legislation on December 20, 2002 resulted in the replacement of the previous legal framework for collective investment undertakings, dating back to the law of March 30, 1988. This resulted in the need to create a new regulatory framework for funds aimed at institutional and other sophisticated investors before the expiry of a transition period in February 2007.

The legislation of February 13, 2007 introduced a new investment vehicle to Luxembourg in the Specialised Investment Fund, providing a more flexible framework than the previous regime for institutional funds under Part II of the December 2002 legislation, as well as broadening the potential investor base.

The SIF legislation was amended just over five years later by the law of March 26, 2012, adapting the regime to European and international developments regarding regulation and transparency of alternative investments, including the EU’s Directive on Alternative Investment Fund Managers, in areas including delegation, risk management and the handling of actual or potential conflicts of interest.

The revisions also aligned the SIF rules in some areas with the UCITS IV directive and the Luxembourg legislation of December 17, 2010 transposing it into national law. The SIF regime was also modified in some areas by the law of July 12, 2013 adopting the AIFMD directive in Luxembourg.

The SIF legislation offers a broader scope of application regarding investor eligibility than the 1991 law on institutional funds that it replaced, replacing the notion of institutional investors with that of well-informed investors.

A well-informed investor is defined as:

  • Any institutional investor;
  • Any professional investor; or
  • Any other investor that confirms in writing that they are a well-informed investor and either invests a minimum of €125,000 in the SIF or is certified by a credit institution, investment firm or management company (as defined by EU directives) as possessing expertise, experience and knowledge to conduct an adequate appraisal of an investment in the SIF.

These restrictions do not apply to directors and other individuals involved in management of the SIF.

The SIF Law therefore extends access to these funds beyond institutional and professional investors to other investors capable of taking an informed decision to accept a lower level of protection than that offered to retail investors through their status, wealth, experience or understanding of the risks investment in a SIF can entail.

SIFs must receive approval from the regulator before they can be launched, based on approval of its constitutional documents, of its managers or directors, and of its choice of depositary bank.

Managers and directors (who do not need to be Luxembourg residents) must be able to demonstrate their professional qualifications and experience, good standing and reputation. However, there is no requirement for approval of the promoter – indeed, there is no requirement for a promoter at all. Unlike in the case of UCITS funds, the promoter does not have to meet a minimum capital requirement.

There is no requirement either for approval of the investment manager, but the CSSF does require notification of the persons responsible for management of the SIF’s investment portfolio, so that the regulator can ensure they are of good reputation and have the experience necessary to manage the type of alternative investment strategy followed by the SIF. Any changes in the identity of the fund’s portfolio managers must also be reported to the regulator.

The CSSF’s approval is required for any substantive change made to the SIF’s offering documents, such as the name of the fund or sub-funds, the replacement of the custodian, administrator, auditor or investment manager, the creation of new sub-funds or a significant change to its investment policy. The regulator may withdraw authorisation for one or more sub-funds of a SIF while maintaining the authorisation for other sub-funds within the same structure.

The 2012 amendments to the legislation stipulate that the activity of management of a SIF must comprise at a minimum management of the investment portfolio. This excludes from the SIF regime passive funds that seek to create value solely by the long-term holding of assets and to create a distinction between SIFs and private wealth management companies governed by Luxembourg’s law of May 11, 2007, but not private equity or real estate funds.

A Luxembourg depositary bank, administrator and auditor must be appointed. The depositary bank only needs to know at any time of how the assets of the SIF are invested and where, and how the assets are available. Unlike with other Luxembourg funds, the depositary (unless the SIF is managed by an authorised alternative investment fund manager and is subject to the full scope of the country’s AIFM legislation) does not have to monitor that the sale, issue, redemption and cancellation of shares or units are carried out in accordance with the law and the articles of incorporation, or that the fund’s income is allocated in accordance with the management regulations or the articles of association.

The SIF regime offers a broad scope of eligible assets; any type of asset can be held by a SIF and any type of investment strategy can be pursued. Assets may include equities, bonds, derivatives, structured products, real estate and shareholdings in unlisted companies. There are no leverage restrictions.

The approach to risk spreading is more flexible than for other types of investment scheme, under regulatory guidelines set out in CSSF Circular 07/309 of August 3, 2007, which states that in principle, a SIF may not invest more than 30% of its assets or commitments in securities of the same type issued by the same issuer, subject to certain exceptions. Equally, in principle short sales may not result in the SIF holding a short position in securities of the same type from the same issuer representing more than 30% of its assets.

This restriction does not apply to securities issued or guaranteed by an OECD member state or its regional or local authorities, or by EU, regional or global supranational institutions and bodies, nor to investment in other funds subject to risk-spreading requirements at least comparable with those applicable to SIFs. Each sub-fund of an umbrella structure is considered as a separate issuer as long as the liabilities of individual sub-funds toward third parties are segregated.

The SIF must ensure a similar level of risk-spreading when investing through derivatives via appropriate diversification of the underlying assets. The counterparty risk in an OTC derivative transaction must, where applicable, be limited with regard to the quality and qualification of the counterparty.

In principle, these guidelines apply to all SIFs. The CSSF may grant exemptions where justified, although in practice it does not permit a higher level of concentration than 40%. In certain cases, the regulator may require the SIF to comply with additional investment restrictions.

The revised SIF law follows the 2010 fund legislation in allowing one sub-fund of a SIF to invest in another, clarifying that the rules set out in Luxembourg’s 1915 company law regarding a company’s investment in its own shares do not apply to SIFs. Sub-funds of the same SIF may not cross-invest in each other, and voting rights of shares held by one sub-fund in another are suspended.

A SIF can be created in different forms, notably as a contractual fund (fonds commun de placement or FCP), an investment company with variable capital (Société d’investissement à capital variable or SICAV) or an investment company with fixed capital (Société d’investissement à capital fixe or SICAF). The FCP has no legal personality and must be managed by a management company, while a SICAV or SICAF can be either self-managed or have an external management company.

A SICAV or SICAF may adopt most of the corporate and partnership forms available in Luxembourg, including public limited liability company (société anonyme or S.A.), private limited liability company (société à responsabilité limitée or S.àr.l.), corporate partnership limited by shares (société en commandite par actions or S.C.A.), common limited partnership (société en commandite simple or SCS), special limited partnership (société en commandite spéciale of SCSp), or co-operative company organised as a public limited liability company (société coopérative organisée comme une société anonyme or SCoSA).

This flexibility of form and structure means, for example, that a private equity fund can be established with a structure and attributes familiar to managers and investors familiar with the Anglo-Saxon limited partnership model.

These entities may be set up as a single fund or as an umbrella fund with multiple sub-funds, each with a different investment policy, if this is authorised by the SIF’s constitutional documents, denominated in different currencies, available to different types of investor or subject to different liquidity rules. A fund or sub-funds may have an unlimited number of share classes, according to the needs of the promoter or investors.

Unless otherwise provided for in the SIF’s constitutional documents, sub-funds within an umbrella fund are governed by the principle of compartment segregation, which means that each sub-fund is treated as a separate entity making distinct transactions, and the rights of creditors are applicable only to the particular sub-fund incurring the liabilities in question.

The SIF legislation sets a minimum capital requirement of €1.25m, which must be reached within the 12 months following authorisation by the CSSF, compared with six months for other funds governed by the 2010 fund legislation. An S.A. must have a minimum capital of €30,000 on incorporation and an S.àr.l €12,000.

At least 5% of the value of each share must be paid up, in cash or in kind, upon subscription. SIFs do not have to comply with any debt/equity ratio, nor are they subject to issue, redemption or distribution restrictions, but the net assets or capital may not fall below €1.25m.

The revised law requires SIFs to put in place systems to monitor, measure and manage the investment risk of its individual positions and their contribution to the portfolio’s overall risk profile. They must also be structured and organised to minimise the risk of conflicts of interest that could arise between the SIF and any person involved in its business activity, or linked to it directly or indirectly, that could have a negative impact on investors’ interests; procedures must be drawn up to manage such conflicts as do arise.

The delegation of tasks and functions to third-party providers will not affect regulation of the fund. As a rule, external providers of portfolio management services to the SIF must be approved for that function and subject to prudential regulation, although the CSSF may grant exemptions to this requirement.

The board of directors of the SIF must be able to ensure that the delegated provider is qualified and capable and must retain ultimate control over the fund’s activities. Delegation should not create conflicts of interest – investment management may not be delegated to the fund’s custodian, for instance – and the delegation of functions must be made clear in the fund’s offering documents.

SIF promoters have a choice between a tax-transparent SIF, set up in the form of an FCP, or a non-tax transparent SIF, set up in the form of a SICAV or SICAF. SIFs are subject to an annual subscription tax (taxe d’abonnement) of 0.01% on their net asset value, calculated at the end of each quarter, compared with a rate of up to 0.05% for other types of fund. The tax does not apply to SIFs investing in other funds that are subject to the subscription tax, that invest only in money-market instruments, or that are pension pooling schemes.

They are not subject to corporate income tax nor net worth tax in Luxembourg, and they enjoy an exemption from VAT on management fees. Non-resident SIF investors are not subject to Luxembourg capital gains tax; distributions are generally exempt from withholding tax.

SIFs may enjoy access to the benefits of certain double taxation avoidance treaties signed by Luxembourg that cover investment companies with fixed or variable capital.

The SIF must issue an offering document and an audited annual report. The offering document, which may be a private placement memorandum, offering memorandum or prospectus, is not subject to minimum content requirements, but it must include all information necessary to enable investors to make an informed judgment about the proposed investment and in particular its risks. It is recommended that the offering document meet all legal requirements imposed on prospectuses.

SIFs are exempt from the obligation to consolidate their accounting. Valuation of the assets is based on fair value. There is no obligation to publish a half-yearly report, only an annual one, which must be provided to investors and the CSSF within six months of the end of the period to which it relates. A SIF does not have to publish its net asset value.

The SIF legislation offers a regime for the establishment of onshore regulated alternative funds that has been tried, tested and refined over more than 13 years, and that is aligned with the requirements for regulation of alternative managers, and, indirectly their funds, under the AIFM Directive as of July 22, 2013.

The establishment of a SIF does not require approval of the promoter or of the investment manager. Even with prior authorisation now required, the SIF regime offers a light-touch regulatory regime with no obligation to publish the fund’s NAV.

With the broad flexibility available to promoters regarding the fund’s investment policy and the range of qualifying options opening up a wide investor base, the SIF offers a well-established vehicle for promoters targeting European institutions and individuals while offering investors sound and effective oversight.

Our investment management team:

  • Helps you find the most suitable investment vehicle to meet your requirements and your goals from a marketing, regulatory, legal and tax perspective.
  • Introduces you to suitable service providers to meet your requirements, namely custodian bank, AIFM, administration agent, registrar and transfer agent, and auditor.
  • Provides assistance with the establishment of the fund, including drafting of the private placement memorandum, assistance with the incorporation of the fund and its general partner, and regulatory filings with the CSSF.
  • Assists with the conversion of offshore funds into SIFs.
  • Provides corporate support services throughout the lifetime of the fund, including amendment of fund documentation, restructuring, or launching and closing of sub-funds.
  • Provides help with changes of service providers including the custodian bank, fund administrator, auditor or registrar and transfer agent.
  • Assists with the listing of the fund’s shares or units on the Luxembourg Stock Exchange’s regulated or EURO MTF.
  • Provides support with the registration of the fund in other jurisdictions, in co-operation with local service providers.
  • Provides advice on AIFMD-related issues.
  • Provides advice to fund promoters on local private placement rules for marketing their funds in Luxembourg.
  • Keeps you up to date on the latest legal and regulatory developments.

For further information, please contact Olivier Sciales at oliviersciales@cs-avocats.lu

Compare two vehicles:


 UCITSUCISIFSICARRAIFSPFSecuritization vehicleUnregulated SCS/SCSpSOPARFI
Practical useHighly regulated vehicle which can
be sold to all types of investors and
cross-border into any other EU
Member State.
Investment funds which do not meet
the criteria set by the EU Directives.
Hedge funds, private equity fund, venture capital fund, real estate fund,
infrastructure fund,
distressed debt fund, microfinance fund,
socially responsible
investment fund,
tangible assets fund
and any other type of
alternative funds.
Private equity and
venture capital
transactions.
Hedge funds, private
equity and venture capital
funds, real estate funds,
infrastructure funds,
distressed debt funds,
Islamic finance funds,
microfinance funds,
socially responsible
investment funds, tangible
assets funds and any other
type of alternative funds.
Individuals wishing
to optimise their
personal tax
planning (private
wealth management
purposes).
• True sale
and synthetic
securitisations.
• Securitisation
of a portfolio of
securities.
• Securitisation
as structure for intra
group financing
activities.
• Securitisation of
non-performing loans.
• Securitisation of
leasing receivables.
• Real estate securitisations (project financing and real estate financing)
Private equity fund, venture capital fund,
real estate fund, private debt fund, crypto fund , ESG fund / Impact investing fund, infrastructure fund,
pledge fund, micro finance fund, socially responsible fund, tangible assets fund, dedicated family office structure
Holding and financing
activity, commercial
activity, holding of
IP, etc.
Applicable legislationLaw of 17 December 2010
Part I (“UCITS Law”)
Law of 17 December 2010
Part II (“UCI Law”)
Law of 13 February 2007 (“SIF Law”)Law of 15 June 2004 (“SICAR Law”)Law of 23 July 2016 ("RAIF Law")Law of 11 May 2007 (“SPF Law”)Law of 22 March 2004 (“Securitization Law”)Law of 10 August 1915 ("Company Law")Law of 10 August 1915 (“1915 Law”)
Authorisation and supervision by the CSSFYesYesYesYesNoNoNo (unless continuous issues of
securities to the public)
NoNo
Qualification as an AIFNoAlways an AIF.Yes, unless exempt.
It is exempt if it does not raise capital from a number of
investors, with a
view to investing it
in accordance with a
defined investment
policy for the benefit
of those investors.
Yes, unless exempt.
It is exempt if it does
not raise capital
from a number of
investors, with a
view to investing it
in accordance with a
defined investment
policy for the benefit
of those investors.
Always an AIFIn principle, no
(as it would not
be considered as
“raising” capital from
a number of investors
as the structure
generally serves for
the investment of the
private wealth of a
“pre-existing group”
(as defined in the
Esma guidelines on
key concepts of the
AIFMD)).
No, in case
• such vehicle
meets the definition of
“securitisation special
purpose vehicle or
securitisation SPV”
under the AIFM Law;
• it issues
collateralised debt
obligations;
• it only issues debt
instruments;
• such entity is not
managed according to
an investment policy
within the meaning of
the AIFM Law.
Non-AIF, unless
activities fall within
the scope of article 1
(39) of the AIFM Law.
Non-AIF, unless
activities fall within
the scope of article 1
(39) of the AIFM Law.
Exemption
from AIFMD
full regime
under lighter
regime (AIFMD
registration
regime)
Not applicable.Possible.Possible.Possible.No.Not applicable.Possible.Possible.Possible.
External
authorised
AIFM
requirement
Not applicable.Required in case the
entity is an AIF that
is not self-managed
and above the AIFMD
threshold.
Required in case the
entity is an AIF that
is not self-managed
and above the AIFMD
threshold.
Required in case the
entity is an AIF that
is not self-managed
and above the AIFMD
threshold.
Always required.Not applicable.Required in case the
entity is an AIF that
is not self-managed
and above the AIFMD
threshold.
Required in case the
entity is an AIF that
is not self-managed
and above the AIFMD
threshold.
Required in case the
entity is an AIF that
is not self-managed
and above the AIFMD
threshold.
Eligible investorsUnrestricted.Unrestricted.Well-informed investorsWell-informed investorsWell-informed investors.Restricted to:
• natural persons
acting in the context
of the management of
their personal wealth;
• management
entities acting solely
in the interest of
the private wealth
(e.g. trusts, private
foundations); and
• intermediaries
acting for the
account of the above
mentioned eligible
investors (e.g. bank
acting under a
fiduciary agreement).
Unrestricted.Unrestricted.Unrestricted.
Eligible assetsRestricted to
transferable securities
admitted or dealt on
a regulated market,
investment funds,
financial derivative
instruments, cash
and money market
instruments that are
in compliance with
article 41 of the Ucits
law and the relevant
EU directives and
regulations.
Please note that the
eligibility of the asset
must be ascertained
on a case-by-case
basis in view of the
applicable laws and
regulatory practice.
Unrestricted.
The investment
objective and strategy
of the fund is subject
to the prior approval
of the CSSF.
Unrestricted.Restricted to investments in securities representing risk capital.
According to the CSSF Circular 06/241, investment in risk capital is to be understood as the direct or indirect contribution of assets to entities in view of their launch, their development or their listing on a stock exchange.
The SICAR is not allowed to invest directly in real estate (except for its own use or through its participations).
Unrestricted, unless it invests in a portfolio of risk capital (such as a Sicar).Restricted to acquisition, detention, management and realization of financial assets.
The SPF is not allowed to carry out commercial activities or to hold directly real estate (except for its own use or through its participations).
Unrestricted.
Securitization of any kind of risks relating to claims, other assets, or obligations assumed by third parties or inherent to all or part of the activities of third parties.
Unrestricted.Unrestricted.
Risk diversification requirementsRisk diversification requirements are provided by articles 42 et seq. of the UCITS Law, e.g. (not exhaustive):
- a UCITS may invest no more than 10% of its assets in transferable securities or money market instruments issued by the same body;
- a UCITS may not invest more than 20% of its net assets in deposits made with the same body;
- the global exposure relating to derivative instruments does not exceed the total net value of the UCITS portfolio.
Risk diversification requirements are defined by IML Circular 91/75 (as amended by CSSF Circular 05/177). Such requirements are less stringent than the ones applicable to UCITS.
In particular, a UCI is not allowed to invest more than 20% of its net assets in securities issued by any one issuer.
Specific restrictions concerning funds adopting an alternative investment strategy are contained in CSSF Circular n° 02/80.
Risk diversification requirements are
defined by CSSF Circular n° 07/309.
Such requirements are less stringent
than the ones applicable to UCITS
and UCI.
In particular, a SIF is not allowed to
invest more than 30% of its net
assets in securities of the same type
of issuer.
Restricted to
investments
in securities
representing risk
capital.
According to the
CSSF Circular
06/241, investment
in risk capital is to
be understood as
the direct or indirect
contribution of assets
to entities in view
of their launch, their
development or their
listing on a stock
exchange.
The SICAR is not
allowed to invest
directly in real estate
(except for its own
use or through its
participations).
Unrestricted, unless it
invests in a portfolio of risk
capital (such as a Sicar).
Restricted to
acquisition, detention,
management and
realisation of financial
assets.
The SPF is not
allowed to carry out
commercial activities
or to hold directly real
estate (except for its
own use or through its
participations).
Unrestricted.
Securitisation of any
kind of risks relating
to claims, other
assets, or obligations
assumed by third
parties or inherent
to all or part of the
activities of third
parties.
Unrestricted.Unrestricted.
Legal FormForm • FCP
• SICAV (SA)
• SICAF (SA,SCA)
All of these entities
must be open-ended.
• FCP
• SICAV (SA)
• SICAF (SA, Sàrl,
SCA, SCS, SCSp)
The entities may be
open-ended or closed-ended.
• FCP
• SICAV (SA, Sàrl,
SCA, SCoSA, SCS,
SCSp)
• SICAF (SA, Sàrl,
SCA, SCoSA, SCS,
SCSp)
The entities may be
open-ended or closed-ended.
• SA
• Sàrl
• SCA
• SCS
• SCSp
• SCoSA
The entities may be
open-ended or closed-ended.
• FCP
• SICAV (SA, Sàrl, SCA,
SCoSA, SCS, SCSp)
• SICAF (SA, Sàrl, SCA,
SCoSA, SCS, SCSp)
The entities may be openended
or closed-ended.
• SA
• Sàrl
• SCA
• SCoSA
A securitisation
vehicle may be set
up in the form of a
company (SA, Sàrl,
SCA, SCoSA) or a
fund consisting of
one or several coownerships
or one
or several fiduciary
estates and managed
by a management
company.
• SCS
• SCSp
• SA, Sàrl, SCA
• SAS
• SCoSA
• SCS
• SCSp
Umbrella structureYesYesYesYesYesNoYesNoNo
Capital requirements• FCP:
EUR 1,250,000 to be
reached no later than
6 months following
the authorisation by
the CSSF.
• Self managed
SICAV / SICAF:
EUR 300,000 at the
date of authorisation
and EUR 1,250,000
within 6 months
following its
authorisation.
• FCP:
EUR 1,250,000 to be
reached no later than
6 months following
the authorisation by
the CSSF.
• Self managed
SICAV / SICAF:
EUR 300,000 at the
date of authorisation
and EUR 1,250,000
within 6 months
following its
authorisation.
EUR 1,250,000 to be
reached no later than
12 months following
the authorisation by
the CSSF.
EUR 1,000,000 to be
reached no later than
12 months following
the auhorisation by
the CSSF.
• FCP:
EUR 1,250,000 to be
reached within 12 months
from the entry into force
of the management
regulations.
• SICAV:
EUR 1,250,000 to be
reached within 12 months
from the incorporation of
the SICAV.
Depends on the form:
• SA / SCA: EUR
30,000
• Sàrl: EUR 12,000
• SCoSA: no
minimum capital
If the securitisation
vehicle is set up as a
company, it depends
on the form:
• SA / SCA: EUR
30,000
• Sàrl: EUR 12,000
If the securitisation
vehicle is set up as
a fund, there is no
minimum capital
requirement.
No minimum capital requirement.Depends on the form:
• SA / SCA: EUR
30,000
• Sàrl: EUR 12,000
No minimum capital
requirement for other
legal forms.
Required Luxembourg service providers• Management
company in case of
an FCP.
• Depositary
institution.
• Administrative
agent.
• Registrar and
Transfer Agent.
• Approved
statutory auditor.
• Management
company in case of
an FCP.
• Depositary
institution.
• Administrative
agent.
• Registrar and
Transfer Agent.
• Approved
statutory auditor.
Management
company in case of
an FCP.
• Depositary bank
or professional of
the financial sector
providing depositary
services, subject to
conditions.
• Administrative
agent.
• Registrar and
Transfer Agent.
• Approved
statutory auditor.
• Depositary bank
or professional of
the financial sector
providing depositary
services, subject to
conditions.
• Administrative
agent.
• Registrar and
Transfer Agent.
• Approved
statutory auditor.
• Management company
in case of an FCP.
• Depositary bank
or professional of the
financial sector providing
depositary services, subject
to conditions.
• Administrative agent.
• Registrar and Transfer
Agent.
• Approved statutory
auditor.
Registered auditor in
principle not required
unless two of the
following criteria are
met: (i) net turnover
above EUR 8.8 million,
(ii) balance sheet
above EUR 4.4 million
and (iii) average
number of employees
above 50.
However, depending
on the legal form
of the company,
there may be an
obligation to appoint
a commissaire aux
comptes.
• Alternative
Investment Fund
Manager (if the
securitisation vehicle
qualifies as an AIF).
• Management
company (if the
securitisation vehicle
is set up in the form
of a fund).
• Independent
auditor.
• No depository
institution (unless for
regulated securisation
vehicles).
• No administrative
agent.
For SCS:
• Alternative
Investment Fund
Manager (if the SCS
qualifies as an AIF).
• No requirement
to appoint a
depositary (except
if the SCS qualifies
as an AIF and is
managed by a duly
authorised AIFM).
For SCSp:
• Alternative
Investment Fund
Manager (if the SCSp
qualifies as an AIF).
• No requirement
to appoint a
depositary (except
if the SCSp qualifies
as an AIF and is
managed by a duly
authorised AIFM).
Registered auditor in
principle not required
unless the company
is an AIF managed
by an AIFM with AUM
above the threshold
or two of the
following criteria are
met: (i) net turnover
above EUR 8.8 million,
(ii) balance sheet
above EUR 4.4 million
and (iii) average
number of employees
above 50.
However, depending
on the legal form
of the company,
there may be an
obligation to appoint
a commissaire aux
comptes.
Possibility of listingYesYesYesYes, but difficult in practice.YesNoNo. In principle no. The
SCS/SCSp may
however issue debt
securities that are
eligible to be listed on
the stock exchange.
Yes
European passportYes.No, unless it falls under the scope of the full AIFMD regimeNo unless it falls under the scope of the full AIFMD regimeNo, unless it falls under the scope of the full AIFMD regime.YesNo
No, unless it falls under the scope of the full AIFMD regime.Non-AIF, unless activities fall within the scop of article 1 (39) of the AIFM Law. No, unless it falls under the scope of the full AIFMD regime.
Net asset value (NAV) calculation and redemption policyTThe UCITS must make
public the issue, sale
and repurchase price
of their units each
time they issue, sell
and repurchase their
units, and at least
twice a month.
The UCIs must make
public the issue, sale
and repurchase price
of their units each
time they issue, sell
and repurchase their
units, and at least
once a month.
At least once a year for reporting
purposes.
Not required. At least once a year for reporting purposes.Not required. Not required. Not required.Not required.
Corporate income taxNo corporate income taxNo corporate income taxNo corporate income taxGeneral aggregate ate: 24.94%

In certain cases,
reduced corporate
income tax rates may apply. Income derived from transferable
securities (e.g.
dividends received
and capital gains
realised on the sale of shares) is exempt. Income on cash held for the purpose of a future investment is also exempt (for one year).
No income tax, unless investing only in risk capital, then SICAR tax regime applicable.No corporate income tax• General
aggregate rate
for securitisation
companies: 24.94%.

Securitisation
vehicles should be
able to deduct from their gross profits their operational costs
and the dividends or interests distributed to the shareholders / creditors. Therefore securitisation
companies should not generate significant taxable profits and should therefore to a large extent be tax neutral.
No corporate income tax applicable. Municipal business tax of 6.75% applicable in very limited circumstances,
namely in case the
SCS/SCSp (i) carries out a commercial
activity or (ii) is
deemed to carry out a commercial activity.

A SCS/ SCSp is
deemed to carry out a commercial activity if its general partner is a
Luxembourg public or private limited liability company holding at least 5% of the partnership interests.

With a proper
structuring of the
GPs partnership
interest it should be possible to avoid the deemed commercial characterisation of
the SCS/SCSp.
General aggregate
rate: 24.94%, but
100% exemption for
dividends, liquidation
proceeds and capital
gains from qualifying
participations.
Subscription tax• Rate: 0.05% of
the NAV annually.
• Reduction: 0.01%
of the NAV annually in
certain specific cases.
• Tax exemptions:
special institutional
money market cash
funds, special pension
funds (including
pension pooling
vehicles) and funds
investing in other
funds which are
already subject to
subscription tax.
• Rate: 0.05% of
the NAV annually.
• Reduction: 0.01%
of the NAV annually in
certain specific cases.
• Tax exemptions:
special institutional
money market cash
funds, special pension
funds (including
pension pooling
vehicles) and funds
investing in other
funds which are
already subject to
subscription tax.
• Rate: 0.01% of
the NAV annually.
• Tax exemptions:
certain money market and pension funds
or SIFs investing in
other funds which
are already subject to subscription tax.
No subscription tax.• Rate: 0.01% of the NAV annually.
• Exemptions apply.
Annual subscription
tax of 0.25% on the
amount of paid up
capital and issue
premium (if any).
No subscription tax.No subscription tax.No subscription tax.
Wealth taxNo wealth tax.No wealth tax.No wealth tax.No wealth tax.No wealth taxNo wealth tax.No wealth tax.No wealth tax.0.5% on the NAV on 1 January.

Since 2017, this
minimum net wealth tax for holding and
finance companies
(known as the
Soparfis)—the fixed financial assets, intercompany loans,
transferable securities
and cash at bank of which exceed both 90% of their gross assets and EUR 350,000—is fixed at EUR 4,815 per year.

The minimum net
wealth tax for all other corporations has not changed; in other words, it is EUR 535 for companies with a
total balance sheet up to EUR 350,000.
Withholding tax on dividends / interests and capital gainsNot subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax.Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax. Dividends distributed
by a Luxembourg
company are in
principle subject to
withholding tax at a rate of 15%, unless a domestic law exemption or a lower tax treaty rate applies.
Benefit from double tax treaty network• SICAV/SICAF:
Limited to certain
double tax treaties
(see circular L.G.
-A n°61 of the tax
administration of 8
December 2017).
• FCP: see circular
L.G.-A n°61 of the tax administration of 8 December 2017.
• SICAV/SICAF:
Limited to certain
double tax treaties
(see circular L.G.
-A n°61 of the tax
administration of 8
December 2017).
• FCP: see circular
L.G.-A n°61 of the tax administration of 8 December 2017.
• SICAV/SICAF:
Limited to certain
double tax treaties
(see circular L.G.
-A n°61 of the tax
administration of 8
December 2017).
• FCP: see circular
L.G.-A n°61 of the tax administration of 8 December 2017.
Yes in case the
SICAR is set-up as
a corporate entity
(except if set-up
under the form of a SCS/SCSp).
• RAIFs investing in a portfolfio of risk capital (such as a SICAR)
Access if set-up as a corporate entity (except if set-up under the form of a SCS/SCSp).

• RAIFs not investing in
a portfolio of risk capital (such as a SICAR), but setup
as:
SICAV / SICAF: Limited to
certain double tax treaties
(see circular L.G. -A n°61 of
the tax administration of 8
December 2017).
FCP: see circular
L.G.-A n°61 of the tax
administration of 8
December 2017.
NoYes for securitisation
companies.
NoYes
Benefit from the EU Parent Subsidiary DirectiveNoNoNoIn principle yes, but
certain jurisdictions
where the target
companies are
located may
challenge the
application of the
directive.
No, unless RAIF that
invests in a portfolio of risk
capital (such as a SICAR).
NoYesNoYes
Thin capitalization rules (debt-to-equity ratio)Borrowings of up to 10% of net assets to finance redemptions (it should be a short
term borrowing
and cannot be for
investment purposes) or to buy real estate
for its business.
The total borrowing
under the above may not exceed 15% of net assets.
Borrowings of
up to 25% of net
assets without any
restrictions are
allowed.
No debt-to-equity ratio.No debt-to-equity ratio.No debt-to-equity ratio.Tax of 0.25% on the debt that exceeds 8 times the paid-up capital increased by the issue premium.No debt-to-equity ratio.No debt-to-equity ratio.No provision in Luxembourg law.
However, there is a specific administrative practice.