Setting Up a Value-Add Alternative Investment Fund in Luxembourg (SCSp) Targeting Poland

Luxembourg’s Special Limited Partnership (SCSp or Special limited Partnership- SLP-) has rapidly become a preferred vehicle for structuring private investment funds across Europe, particularly in real estate and infrastructure strategies. For investors looking to tap into Poland’s growing value-add asset market, setting up a Luxembourg-based SCSp provides a flexible, tax-efficient, and investor-friendly framework.

Why SCSp for Value-Add Strategies?

The SCSp, or Société en Commandite Spéciale (Special limited Partnership- SLP), is modeled closely on Anglo-Saxon limited partnerships. It combines contractual freedom, full tax transparency, and flexible governance—making it ideal for alternative investment strategies.

In the SCSp structure:

• General Partner (GP): Manages the fund and bears unlimited liability. Typically, a Luxembourg SARL is used to limit exposure.

• Limited Partners (LPs): Investors contribute capital but have limited liability and no day-to-day management rights.

GP-LP Regime and Tax Transparency 

Luxembourg’s SCSp (Special limited Partnership- SLP) is not a legal entity per se, but a contractual arrangement. It is fully tax-transparent, meaning:

• The SCSp itself is not subject to corporate income tax, municipal business tax, or net wealth tax in Luxembourg.

• LPs are taxed at their own level, according to their tax residence.

• The GP (if organized as a Luxembourg company) may be subject to local taxes on its management fees and carried interest, depending on the structure.

This transparency allows foreign investors to avoid layers of taxation while ensuring full compliance with international tax regulations, including ATAD, DAC6, and BEPS.

Accounting and Regulatory Obligations

Although unregulated (unless formed under RAIF, SIF, or SICAR umbrellas), the SCSp (Special limited Partnership- SLP) must:

• Prepare annual accounts (Lux GAAP or IFRS) and file them with the Luxembourg Trade Register.

• Appoint a Luxembourg-based AIFM (Alternative Investment Fund Manager), unless exempted under the de minimis rule (AUM < €100M with leverage or < €500M without leverage and no redemption for 5 years).

• Comply with AML-CFT due diligence, KYC rules, and maintain a registered office in Luxembourg.

Damalion assists clients by:

• Structuring the SCSp, drafting the LPA (Limited Partnership Agreement), and incorporating the GP.

• Coordinating with licensed AIFMs, custodians, administrators, and auditors.

• Ensuring proper tax and legal structuring for both EU and non-EU investors.

• Handling ongoing compliance, accounting, and annual filings.

Why Poland? 5 Most Attractive Regions for Value-Add Investments

Poland is one of Europe’s most dynamic real estate markets, with strong fundamentals, EU membership, and consistent GDP growth. Here are the five most attractive investment regions:

1. Warsaw

Poland’s capital is the most liquid and mature real estate market, ideal for:

• Office-to-serviced apartment conversions

• Corporate headquarters

• Retail (shopping centers and high street)

• Senior living and private healthcare facilities

2. Kraków

As Poland’s tech and university hub:

• Student housing and co-living assets perform well.

• Data centers benefit from local tech talent and energy infrastructure.

• Value-add commercial office upgrades are popular post-COVID.

3. Wrocław

Known for manufacturing and logistics:

• High demand for urban logistics hubs and last-mile warehouses.

• Opportunities in education infrastructure and affordable housing.

4. Tricity (Gdańsk, Gdynia, Sopot)

Rapidly growing coastal market:

• Hospitality assets attract tourism capital.

• Retail parks and supermarkets expanding in suburban zones.

• Good zone for serviced apartments and student housing.

5. Poznań

Strong mid-sized city with stable yield profiles:

• Attractive for data centers

• Renovation of old offices into boutique hotels or healthcare centers.

• Education and residential build-to-rent projects attract institutional capital.

For institutional or private investors aiming to deploy capital into Poland’s value-add real estate segments, a Luxembourg SCSp offers the ideal mix of flexibility, transparency, and professional management. Whether you’re targeting a data center in Kraków, a logistics park in Wrocław, or converting offices into hospitality assets in Warsaw, Damalion ensures that your fund structure is solid, compliant, and efficient from day one.

Damalion’s multi-disciplinary team provides end-to-end support—from fund setup and tax structuring to partner coordination and regulatory compliance—so you can focus on your investment strategy while we take care of the rest. Please contact your Damalion expert now to setup your Luxembourg unregulated investment fund.

10 top tourist spots to visit during your 24‑hour business trip in Poland, each with an official website link:

1. Historic Centre of Warsaw (Old Town) – The beautifully reconstructed medieval core, a UNESCO site perfect for a scenic 1‑hour stroll

2. Warsaw’s Royal Castle – Imposing Baroque‑Mannerist palace and museum in Castle Square, steeped in national history

3. Łazienki Park & Palace on the Isle – Warsaw’s largest royal park with peacocks, summer concerts, and tranquil gardens

4. Wilanów Palace – Majestic 17th‑century royal residence and museum, surrounded by formal gardens

5. Wawel Royal Castle (Kraków) – World‑class hilltop historical and cultural complex with cathedral and royal apartments

6. Wawel Cathedral – Majestic Gothic cathedral and coronation site located on Wawel Hill

7. Warsaw Barbican – Historic fortified gateway connecting Old and New Towns—a medieval stronghold relic

8. National Museum in Warsaw – Vast art museum featuring Polish and international collections from antiquity to modern times

9. Krakowskie Przedmieście, Warsaw – Elegant Royal Route avenue lined with churches, palaces, and cafés

10. Warsaw Official Tourist Portal – One‑stop portal for sightseeing, events, transport, and dining tips.

Itinerary Fit for your 24 Hour business trip

Morning (Warsaw):

• Start at Old Town for breakfast and photos

• Walk up Krakowskie Przedmieście to Royal Castle

• Stroll through Łazienki Park for a quiet break

Afternoon (Warsaw):

• Stop at National Museum for art and culture

• Visit Wilanów Palace if time allows (OK by taxi or tram)

Evening (Kraków option):

• If flying to Kraków, head to Wawel Royal Castle and Wawel Cathedral before dinner

• Return to Warsaw or extend stay in Kraków

These iconic spots give a rich taste of Polish history, culture, and architecture—all possible within a busy one-day business trip.