Luxembourg Common Limited Partnership (SCS)

Key Features

• Corporate Flexibility: Operates under a partnership agreement with broad structuring options.
• Legal Structure:
  • Requires at least one General Partner (GP) with unlimited liability.
  • One or more Limited Partners (LPs) with liability limited to their contributions.
  • No minimum capital requirements.
• Investment Scope: Suitable for private equity, real estate, venture capital, hedge funds, debt, and other alternative investments.
• Quick Time-to-Market: No regulatory approval required; operational immediately upon registration.
• Contractual Freedom: Terms and conditions fully customizable in the Limited Partnership Agreement (LPA).
   

Taxation

• Tax Transparent: SCS is fiscally transparent and not subject to corporate income tax, net wealth tax, or municipal business tax in Luxembourg.
• Taxation at Partner Level:
  • Limited Partners are taxed in their jurisdiction of residence.
  • General Partner may be subject to Luxembourg taxation if receiving management fees.
• No Withholding Tax on profit distributions.
• Potential Tax Treaty Benefits: Can benefit from tax treaties if structured correctly.
   

Governance & Service Providers

• General Partner (GP): Responsible for fund management and decision-making.
• Alternative Investment Fund Manager (AIFM):
  • Required if the SCS qualifies as an Alternative Investment Fund (AIF).
  • If appointed, enables EU passporting for cross-border fundraising.
• Depositary Requirement: Only necessary if managed by an AIFM.
• Central Administration: Must maintain books and records in Luxembourg.
• Auditor: Not mandatory unless classified as an AIF.

Advantages of a Luxembourg SCS

• No Direct Regulation: Not supervised by the CSSF unless managed by an AIFM.
• High Flexibility: No restrictions on governance, investment strategy, or distributions.
• Tax Efficiency: Full tax transparency and no withholding tax.
• Investor-Focused Structure: Suitable for institutional, professional, and private investors.
• Cost-Effective Setup: No capital requirements, no depositary needed (unless under AIFM Directive), and low compliance burden.
• Efficient Transferability: LP interests can be transferred as per the LPA.
   

Use Cases

• Private Equity & Venture Capital Funds
• Real Estate Investment Vehicles
• Debt & Credit Funds
• Hedge Funds & Family Office Structures
   

Setup & Support by KENDRIS Capital

• Assistance with structuring and registration of an SCS in Luxembourg.
• Drafting of the Limited Partnership Agreement (LPA) and legal documentation.
• Ongoing administration, management, and tax compliance services.
   

Luxembourg SCS Factsheet

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