Luxembourg Reserved Alternative Investment Fund (RAIF)

Key Features

• Corporate Flexibility: Can be structured as a common fund (FCP), an investment company (SICAV or SICAF), or a partnership (SCS or SCSp).
• Investment Scope: Can invest in all types of assets, including private equity, real estate, hedge funds, debt, infrastructure, and more.
• Quick Time-to-Market: No prior approval from the CSSF required, allowing for faster setup.
• Umbrella Fund Structure: Multiple sub-funds (compartments) can be created with separate assets and liabilities.
• EU Passporting Rights: Managed by an EU-authorized AIFM, enabling marketing across the European Union.
   

Taxation

• Tax Neutrality: No additional tax burden at the fund level.
• General Tax Treatment:
  • SIF-Like Treatment (default): Exempt from Corporate Income Tax; subject to an annual subscription tax of 0.01%.
  • SICAR Treatment (if opted for): Exempt from Corporate Income Tax on risk capital income; not subject to subscription tax.
  • Limited Partnership Treatment (SCSp or SCS): Tax transparent, not subject to Luxembourg taxes at fund level.
• No Withholding Tax on distributions to investors.
• Tax Treaty Benefits: Potential access to double taxation agreements and EU Parent-Subsidiary Directive relief.
   

Governance & Service Providers

• Alternative Investment Fund Manager (AIFM): Mandatory appointment of an authorized AIFM (EU based).
• Depositary: Required to appoint a regulated Luxembourg based depositary.
• Central Administration: Must be performed in Luxembourg.
• Auditor: Must be a Luxembourg based approved statutory auditor.

Advantages of a Luxembourg RAIF Structure

• Regulatory Efficiency: No need for CSSF approval, ensuring a streamlined launch process.
• Flexibility in Asset Classes: Can invest in a wide range of asset classes, including alternative investments.
• Cost-Effectiveness: Lower operational and compliance costs compared to directly regulated Luxembourg funds.
• Investor Protection: Managed by an authorized AIFM under the AIFM Directive, ensuring investor safeguards.
• Scalability: Suitable for both single-strategy funds and multi-compartment umbrella structures.
• Attractive Exit Options: Can be structured as open-ended or closed-ended, offering investor liquidity flexibility.
   

Conversion & Setup Support by KENDRIS Capital

• Existing fund structures can be converted into a RAIF if compliant with the AIFM Directive.
• Assistance is available for structuring, registration, and operational setup.
   

Luxembourg RAIF Factsheet

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