Introduced by the Law of 15 June 2004 in Luxembourg, the société d’investissement en capital à risque (SICAR) is an investment company in risk capital, which is an investment fund that was constructed for investments in private equity and venture capital.
The intention for introducing the SICAR was to introduce a vehicle that could withstand the specific structural needs of private equity and venture capital projects while benefiting from a light regulatory regime and still being subject to the permanent supervision of the Commission de Surveillance du Secteur Financier (CSSF). In general, the SICAR regime provides a great deal of corporate flexibility along with favorable tax treatment.
Features of a Luxembourg SICAR
| SICAR | A SICAR is a vehicle with the primary subject of investing in risk-bearing assets to the benefit of qualified investors. It can be use for private equity and venture capital transactions, and indirect real estate investment. |
| Applicable legislation | SICARs are subject to the Luxembourg Law of 15 June 2004 (SICAR Law), which was modified in October 2008 and by the Law of 12 July 2013 on Alternative Investment Fund Managers (AIFM Law) |
| Eligible investors | a SICAR is restricted to well-informed investors, (institutional investors, professional investors, and other investors who must comply with specific requirements) who can be natural persons or legal entities. |
| Eligible assets | A SICAR may invest its assets in securities representing risk capital |
| Risk diversification | Not required |
| Legal Form | A SICAR can be established in any of the following legal forms: • A public limited company (société anonyme or S.A.) • A private limited liability company (société à responsabilité limitée or S.à r.l.) • A partnership limited by shares (société en commandite par action or S.C.A.) • A cooperative company organised as a public limited liability company (société cooperative organisée comme une or ScoS.A.) • Limited partnership (société en commandite simple or S.C.S. and société en commandite simple à capital variable or S.C.S. à capital variable). |
| Segregated compartments | Yes, the prospectus of a SICAR may permit the set up of multiple compartments. |
| Capital requirements | A SICAR require a minimum subscribed share capital of € 1 million, which must be reached within 12 months of the company being authorised. |
| Net asset value (NAV) calculation and redemption policy | Not required |
| Tax regime | SICARs created under a form of a capital company are subject to general company taxes in Luxembourg at normal rates (Corporate Income Tax, Municipal Business Tax and solidarity surcharge stands presently at 24.94 % in Luxembourg) Any income emerged from securities as well as any income from the sale, contribution or liquidation thereof are fully exempt. SICARs are also exempt from net wealth tax, subscription tax, and withholding tax on dividends /interests and capital gain |
| Double tax treaty and access to EU Parent-Subsidiary Directive | SICARs, from a Luxembourg viewpoint, benefit from the EU Parent-Subsidiary Directive and the double tax treaties concluded by Luxembourg as they are fully taxable corporations. |
| Authorisation and supervision by the CSSF | As regulated vehicle, a SICAR is under the supervision of the CSSF. |
| Possibility of listing | a SICAR is permitted to list its shares on the Stock Exchange only under specific conditions |
| European passport | No (unless it falls under the scope of the full AIFMD regime) |
| Required Luxembourg service providers | Independent auditor Central Administration & Registrar Depositary |
Being a regulated and fiscally efficient structure designed for private equity and venture capital investments, the SICAR is an interesting vehicle in Luxembourg and abroad.
Damalion experts help international investors, venture capitalists and private equity firms to set up and manage their SICAR in Luxembourg. Please contact your Damalion expert now.
Use Luxembourg Société d’Investissement en Capital à Risque (SICAR) — private equity and venture capital vehicle for well-informed investors under CSSF supervision.
For private equity, venture capital, growth capital and similar risk-capital strategies • We help scope the structure, assemble documents, and coordinate providers. Acceptance and authorization remain with the authorities and the bank(s).
Last updated:What is a SICAR?
A SICAR is a Luxembourg investment company that invests in risk capital. It suits private equity and venture capital. It welcomes only well-informed investors. It is supervised by the CSSF. Diversification rules do not apply. The legal basis is the Law of 15 June 2004 (consolidated).
Why choose a SICAR?
- Focus on risk capital: flexible deal-by-deal investment policy.
- No diversification rule: invest in concentrated positions if the policy allows it.
- Corporate forms: S.A., S.à r.l., S.C.A., ScoSA, S.C.S., or S.C.S. à capital variable.
- Compartments: possible if foreseen in the constitutive documents.
- Tax profile: generally fully taxable company but with exemption on income and gains from risk capital. No subscription tax. No net wealth tax.
- Treaty access: usually benefits from double tax treaties and the EU Parent-Subsidiary Directive because it is fully taxable in principle.
Key parameters at a glance
| Topic | Rule / Market practice |
|---|---|
| Eligible investors | Well-informed investors (institutional, professional, or other investors meeting legal conditions). |
| Eligible assets | Assets representing risk capital (direct or indirect contributions for launch, development, or listing of entities). |
| Diversification | Not required for SICARs. |
| Minimum capital | EUR 1,000,000 within 12 months from authorization. |
| Supervision | CSSF authorization and ongoing oversight. |
| Service providers | Depositary (for applicable forms), central administration/registrar, approved auditor; AIFM or registered AIFM depending on thresholds. |
| Reporting | Annual report and audit. No semi-annual report requirement. Prospectus required. |
| Passporting | No product passport. A manager authorized under AIFMD may use the manager passport for marketing to professional investors in the EU, subject to conditions. |
| Tax | Corporate taxes apply in principle; exemption for income and gains from risk capital. No subscription tax. No net wealth tax. |
| Listing | Possible under specific conditions. |
Documents you usually need
- Draft constitutive documents and investment policy describing risk-capital scope.
- Prospectus and disclosures consistent with AIFMD where relevant.
- Details of the AIFM (authorized or registered), portfolio management, and risk management.
- Depositary agreement (if applicable), central administration and registrar mandates, auditor engagement.
- AML/CFT framework and investor eligibility process for well-informed investors.
- Proof of initial capital and timetable to reach EUR 1,000,000 within 12 months.
How the setup typically unfolds
- Define strategy and legal form. Align the vehicle with risk-capital objectives.
- Appoint core providers. AIFM/manager, depositary (if applicable), administrator/registrar, auditor.
- Draft documents. Constitutive documents and prospectus that reflect the risk-capital policy.
- File for authorization. Submit the CSSF application with required attachments.
- Close and admit investors. Verify “well-informed” status. Complete AML/CFT checks.
- Call capital and invest. Execute deals consistent with the policy; monitor and report annually.
Costs and timing
- One-off legal and setup costs. Ongoing fees for AIFM/manager, depositary (if applicable), administration, audit, and directors.
- CSSF review time varies with completeness and complexity.
- From complete file to launch: often several weeks to a few months, depending on the project.
Related reading
Frequently asked questions
Who can invest in a SICAR?
Only well-informed investors: institutional investors, professional investors, and other investors who meet statutory conditions (including a minimum investment or certification).
What counts as “risk capital” for a SICAR?
Direct or indirect contributions to entities for their launch, development, or listing. The CSSF circular and practice guide this assessment on a case-by-case basis.
Is diversification required?
No. The SICAR regime does not impose diversification rules. The policy can allow concentrated positions if disclosed.
What is the minimum capital?
EUR 1,000,000 to be reached within 12 months from authorization.
Which legal forms are available?
S.A., S.à r.l., S.C.A., ScoSA, S.C.S., and S.C.S. à capital variable.
Is the SICAR supervised?
Yes. The CSSF authorizes and supervises SICARs. Ongoing obligations include reporting and audited annual accounts.
Does a SICAR have a product passport?
No. There is no product passport. If managed by an authorized AIFM, the manager may market to professional investors in the EU under the AIFMD manager passport, subject to conditions.
Is there a prospectus?
Yes. A prospectus is required. It must describe the investment policy, risk factors, fees, governance, and investor eligibility.
Are semi-annual reports required?
No. The law does not require a semi-annual report. An annual report and audit are required.
How are investors verified?
By an eligibility check for the “well-informed” status and by AML/CFT onboarding with appropriate evidence and screening.
What is the tax regime?
The SICAR is in principle fully taxable, but income and gains from risk-capital investments are exempt. There is no subscription tax and no net wealth tax. Treaty access is generally available.
Are distributions subject to withholding tax?
Luxembourg does not levy withholding tax on dividends paid by a SICAR in corporate form under current rules. Always confirm in each case and check investor-country taxation.
Can a SICAR have compartments?
Yes, if the constitutive documents allow it. Each compartment can have its own policy and assets/liabilities.
Is listing possible?
Yes, under specific conditions. The decision depends on the structure, investor base, and market requirements.
Must an AIFM be appointed?
Appointment depends on AIFMD thresholds. Above thresholds, an authorized AIFM is required. Below thresholds, a registered AIFM regime may apply.
How are virtual assets treated?
Investment in virtual assets is possible only if consistent with the SICAR’s risk-capital policy and with the CSSF’s AML/CFT expectations. Additional care is required.
Do reverse-hybrid rules affect SICARs?
Luxembourg clarified the CIV exemption under reverse-hybrid rules in 2025. Impact depends on the legal form and investor profile. Seek tax advice for each setup.
Are there PRIIPs KID obligations?
SICARs target well-informed investors, not retail. PRIIPs usually does not apply. Assess any specific marketing that could trigger retail-type disclosures.
How long does authorization take?
Timing depends on completeness and complexity. Well-prepared files tend to move faster. Expect several weeks to a few months.
What accounting and audit rules apply?
Annual audited financial statements are required. Consolidated accounts are generally not required for SICARs. Follow applicable Luxembourg company law and CSSF guidance.
