Luxembourg is working hard to establish its stellar reputation as an excellent destination of a wide range of investment funds. The Luxembourg Parliament continuously enhances its investment toolbox for investment managers, allowing them to strategically organize their investments while safeguarding investors best interests.
By being one of first countries in the EU to transfer AIFMD into local law, Luxembourg has further boosted its position as an ideal destination for alternative investment funds. As of the first quarter of 2021, Luxembourg is home to almost 400 management companies, 250 of which are authorized AIFMs and more than half of those offering third-party AIFM services. Additionally, there are more than 605 registered sub-threshold managers in the Grand-Duchy of Luxembourg.
Damalion provides you with a brief overview of well-known fund vehicles that can be incorporated in Luxembourg across major asset classes and investment strategies.
| SICAV-SIF SCA | SICAV-RAIF SCA | SICAV-RAIF SCSp | Unregulated SCSp | |
|
Form |
Corporate partnership limited by shares in the form of an investment company with variable capital and subject to SIF law | Corporate partnership limited by shares in the form of an investment company with variable capital and subject to SIF law | Special limited partnership without legal personality functioning as an investment company with variable capital and subject to RAIF law | Special limited partnership without a legal personality |
| Tax Treatment | Non-tax transparent in nature but enjoys tax privileges with the exemption of annual subscription tax, which is 0.01% of its net asset value. | Non-tax transparent in nature but enjoys tax privileges with the exemption of annual subscription tax, which is 0.01% of its net asset value. | Tax transparent in nature but assessed with annual subscription tax, which is 0.01% of its net asset value |
|
| Transfer Tax | No | No | No | No |
| Possibility of Listing | Yes | Yes | Yes, but complicated in nature | N/A |
| Open or close-ended |
May be open or close-ended |
May be open or close-ended |
May be open or close-ended | May be open or close-ended |
| Regulating Authority |
|
Light supervision and adherence to full requirements under AIFMD |
Light supervision and adherence to full requirements under AIFMD | Not under any regulating authority but should follow AIFMD for full scope unregulated SCSp |
| Investor Restrictions |
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| Best Qualities |
|
Highly flexible umbrella structure
No direct CSSF guidance |
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| Worst Qualities |
|
Extensive diversification requirements |
Extensive diversification requirements |
Absence of umbrella structure |
| Applications | Commonly used to hold private equity, real estate, and infrastructure assets | Commonly used to hold private equity, real estate, and infrastructure assets | Commonly used to hold private equity, real estate, and infrastructure assets | Commonly used to hold private equity, real estate, and infrastructure assets |
Damalion is an independent consulting management company which articulates work alliances with accredited professionals. Damalion experts deploy an extensive expertise in the formation of investment funds in Luxembourg. We take pride in our excellence of merging excellence and intelligent exigence with a professional and highly responsive attitude to providing advice to our clientele. To discover the ideal investment vehicle for your needs, contact our Damalion experts today.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
