The Luxembourg Special Limited Partnership (SLP) is a favored legal structure for alternative investment funds, offering significant flexibility and confidentiality, which makes it appealing to both investors and fund managers.

Luxembourg law of July 12, 2013: special limited partnership

Established under the Luxembourg law of July 12, 2013, the SLP is designed to accommodate the needs of private equity, real estate, hedge funds, and other alternative investment strategies. Its structure is inspired by the Anglo-Saxon limited partnership model, providing a blend of familiarity for international investors and the advantages of Luxembourg’s favorable regulatory environment.

Structure and Legal Framework

The SLP does not possess a separate legal personality, which means it operates through its partners, similar to a traditional partnership. It requires at least one general partner (GP) and one or more limited partners (LPs). The general partner is responsible for managing the partnership and is liable for the partnership’s obligations. In contrast, the limited partners contribute capital but have their liability restricted to their investment in the partnership. This distinction allows the general partner to manage the business without interference, while limited partners can invest without incurring unlimited liability.

The primary governing document of the Special limited partnership (SLP) is the Limited Partnership Agreement (LPA), which is a private contract between the partners. The LPA outlines the rules and procedures governing the partnership’s operations, including capital contributions, profit distribution, decision-making processes, and exit strategies. Since the LPA is not required to be filed with a public authority, the terms can remain confidential. This contractual freedom allows the SLP to be highly adaptable, catering to the specific needs and requirements of the partners.

Regulatory Environment

Luxembourg’s regulatory framework offers flexibility for SLPs, allowing them to operate as either regulated or unregulated entities. If the SLP qualifies as an Alternative Investment Fund (AIF) under the Alternative Investment Fund Managers Directive (AIFMD), it must appoint an authorized Alternative Investment Fund Manager (AIFM). This arrangement allows the SLP to benefit from the AIFMD marketing passport, enabling the fund to be marketed to professional investors across the European Union.

On the other hand, an SLP that does not wish to be regulated under the AIFMD can operate with fewer regulatory requirements, provided it does not exceed the de minimis thresholds set by the directive. This option provides fund managers with the flexibility to choose the level of regulation that best suits their investment strategy and target investor base. The dual regulatory approach makes the SLP a versatile vehicle, attractive to a broad spectrum of investors and fund managers.

Taxation Benefits

The tax treatment of the SLP is one of its most significant advantages. The SLP is considered tax-transparent, meaning it is not subject to corporate income tax, municipal business tax, or net wealth tax at the entity level. Instead, profits and losses are passed through to the partners, who are taxed based on their residency and applicable tax treaties. This transparency helps avoid double taxation and makes the SLP an efficient structure for international investors.

Moreover, capital contributions to the SLP are not subject to capital duty, and limited partners, especially those residing outside Luxembourg, may benefit from an exemption from withholding tax on profit distributions. These features enhance the SLP’s attractiveness by providing a tax-efficient environment for investment.

Operational Flexibility and Simplicity

The SLP is highly versatile and can be used for a wide range of investment strategies, including private equity, venture capital, real estate, and hedge funds. Its ability to issue various classes of partnership interests allows fund managers to tailor investment terms to different types of investors. The partnership’s structure accommodates diverse investment objectives, making it an ideal vehicle for both large institutional investors and smaller private investors.

One of the key advantages of the SLP is that it is not required to produce an annual accounting report. This reduces the administrative burden and associated costs, making the SLP an attractive option for fund managers seeking operational simplicity. The absence of this requirement simplifies compliance and reporting, making the SLP a practical and efficient choice for managing investment funds.

The Luxembourg Special Limited Partnership is a highly flexible, tax-efficient, and investor-friendly structure, well-suited for alternative investment funds. Its combination of contractual freedom, favorable tax treatment, and options for regulatory oversight makes it an attractive choice for fund managers and investors looking to take advantage of Luxembourg’s robust financial sector. The SLP’s simplicity, including the lack of an annual accounting report requirement, further enhances its appeal, positioning it as a leading choice for structuring alternative investment vehicles.

Damalion supports investors who want to structure their investments throughout Luxembourg. To benefit from the Luxembourg Special Limited Partnership, please contact your Damalion expert now.

This communication is for informative purpose only. Damalion focused on advising families for wealth preservation by identifying opportunities and challenges. Please contact your Damalion expert now.

Luxembourg Special Limited Partnership (SLP / SCSp) — main takeaways for investors and sponsors: setup, roles, filings, privacy, AIF options, tax points, and timelines.

For general partners, limited partners, family offices, private equity, venture capital, real assets and private credit • Damalion helps you coordinate documents and providers. Decisions remain with authorities and your contracted firms.

Last updated:

What is the SLP / SCSp?

The Special Limited Partnership (Société en Commandite Spéciale, SCSp) is a Luxembourg partnership without legal personality. It is based on a private limited partnership agreement. One or more general partners manage and are liable without limit. Limited partners provide capital and have limited liability.

Why managers and investors use it

• Flexible contract terms inside the partnership agreement.
• Privacy: only an extract is published; the agreement stays private.
• Usually tax-transparent at entity level.
• Usable as an unregulated partnership or within a fund wrapper such as a RAIF with an AIFM.
• Common for private equity, venture capital, real estate, infrastructure and private credit.

Roles and management

• General partner (GP): manages the partnership; unlimited liability.
• Limited partners (LPs): provide capital; no management; limited liability.
• Advisory bodies and investor consents can be defined in the agreement without turning LPs into managers.

Filings and records

• Register extract filed with the Luxembourg RCS. The limited partnership agreement is not published.
• Register of partners and capital accounts kept by the partnership.
• If used as an AIF: AIFM appointment, depositary (if required), auditor and central administration per the chosen framework.

Common setup routes

Topic	Unregulated SCSp	SCSp used as a RAIF
Supervision	No product authorization. AIFM may be registered or authorized depending on thresholds.	RAIF uses an authorized AIFM and follows AIFMD rules via the AIFM.
EU marketing	National regimes or passport if managed by an authorized AIFM.	Professional-investor passport via the authorized AIFM.
Depositary	Required if rules trigger it (AIF with authorized AIFM or by strategy).	Depositary in Luxembourg required.
Fund-level taxes	Generally transparent; no CIT/MBT/NWT at partnership level in typical models.	Transparent; RAIF may owe subscription tax for certain assets.
Disclosure	Public extract with GP; agreement stays private.	RAIF notarial deed and investor disclosures per AIFMD.

Costs and timing

• Setup: drafting, notary where applicable, RCS filings, provider onboarding.
• Running: administration, AIFM/ManCo, depositary if applicable, audit if required, and legal support.
• Timing depends on structure, bank KYC and provider coordination.

Related reading

• Comprehensive guide to the SCSp
• Understanding the SCSp
• SLP for master–feeder structures
• RAIF overview

Frequently asked questions

1) Does the SCSp have legal personality?

No. It is a partnership without legal personality. It acts through its partners and agents.

2) Which law governs the SCSp?

The Luxembourg law of 10 August 1915 on commercial companies, as amended. If used as an AIF, AIFMD rules apply via the appointed AIFM.

3) What must be filed at the RCS?

A public extract with mandatory items and GP identification. The limited partnership agreement remains private.

4) Who manages the partnership?

The general partner manages. Limited partners do not manage; they may have advisory or consent rights defined in the agreement.

5) How is the SCSp taxed at entity level?

Generally tax-transparent in typical investment models. No Luxembourg corporate income tax, municipal business tax or net wealth tax at partnership level.

6) Are distributions subject to Luxembourg withholding tax?

Luxembourg does not levy withholding tax on typical profit distributions from an SCSp, subject to anti-abuse and specific rules.

7) When is a depositary required?

For a RAIF and for AIFs managed by an authorized AIFM. Other cases depend on manager status and structure.

8) Are audited financial statements mandatory?

Not by default for an unregulated SCSp. Audit commonly applies under AIF frameworks and investor documentation.

9) Are annual accounts filed like a company limited by shares?

No. Books and records are kept; disclosures follow the chosen framework and investor documents.

10) What are the AIFM thresholds?

Common thresholds: EUR 100m with leverage or EUR 500m unleveraged and closed-ended. Above thresholds, authorization is required to use the EU passport.

11) Can the SCSp be set up as a RAIF?

Yes. The RAIF can take the form of an SCSp. An authorized AIFM and a Luxembourg depositary are then required.

12) How are classes and series handled?

They are permitted if allowed by the partnership agreement. Classes and series are common for carried interest and investor-specific terms.

13) How is the GP usually structured?

Often as a Luxembourg limited liability company to ring-fence liability and set governance.

14) What VAT rules may apply?

Certain fund management services can be VAT-exempt. The position depends on the regime and the services supplied.

15) Can the SCSp conduct commercial activity?

The SCSp is designed for investment holding and related activities. Commercial operations require separate analysis.

16) How are conflicts of interest addressed?

Through clear rules in the partnership agreement, related-party checks, and advisory committee oversight if used.

17) Can non-EU investors subscribe?

Yes, subject to eligibility, sanctions compliance and investor classification rules.

18) What investor disclosures are standard?

Strategy, risks, fees, valuation, liquidity, leverage and governance; AIFMD disclosures where applicable.

19) How is marketing performed in the EU?

Through national private-placement regimes or via the AIFMD passport when managed by an authorized AIFM and addressed to professional investors.

20) Can the SCSp be reorganized or migrated?

Reorganizations may be achieved via transfers, contributions or continuations where permitted. Legal and tax advice is required before any change.