General Overview
- Legal Basis: Governed by the Luxembourg Law of 13 February 2007, as amended.
- Regulatory Oversight: Supervised by the Commission de Surveillance du Secteur Financier (CSSF).
- Target Investors: Reserved for well-informed investors, including institutional investors, professional investors, and high-net-worth individuals.
- Setup Timeframe: The setup timeframe ranges from 2 to 3 months, though it can vary depending on the complexity of the structure.
Key Features
- Corporate Flexibility: Can be structured as:
- Common fund (FCP) (managed by a management company)
- Investment company (SICAV/SICAF) with variable or fixed capital
- Partnerships (SCS/SCSp)
- Investment Scope: No restrictions; can invest in private equity, real estate, hedge funds, debt, infrastructure, and other alternative assets.
- Diversification Rule: No single asset may exceed 30% of the fund’s total assets (exceptions may apply).
- Approval Process: Requires CSSF authorization before launch, but post-launch compliance is lighter than UCITS.
- Umbrella Structure: Can create multiple sub-funds with distinct investment strategies.
Taxation
- Tax Neutrality: Exempt from corporate income tax, municipal business tax, and net wealth tax.
- Subscription Tax: Annual rate of 0.01% on net assets (some exemptions apply, e.g., pension funds, microfinance funds).
- No Withholding Tax on distributions to investors.
- Tax Treaty Benefits: May access double tax treaties depending on structuring.
Governance & Service Providers
- CSSF-Regulated: Requires authorization and ongoing compliance.
- Alternative Investment Fund Manager (AIFM):
- Mandatory unless exempt (small AIFM regime).
- If appointed, enables EU passporting rights for marketing to professional investors across Europe.
- Depositary Requirement: Must appoint a Luxembourg-regulated depositary for safekeeping of assets.
- Central Administration: Must be based in Luxembourg.
- Auditor: A Luxembourg statutory auditor must be appointed.
Advantages of a Luxembourg SIF
- Regulated yet Flexible: Provides investor protection with lighter ongoing regulatory compliance than UCITS.
- Broad Investment Scope: Can invest in virtually any asset class.
- Cost-Effective: Competitive tax treatment and ability to pool multiple strategies in an umbrella structure.
- EU Passporting: If managed by an authorized AIFM, can be marketed across the EU.
- Strong Market Recognition: Well-established framework widely accepted by institutional investors.
Use Cases
- Private Equity & Venture Capital Funds
- Real Estate Investment Vehicles
- Hedge Funds & Debt Funds
- Infrastructure Investments
- Fund of Funds Structures
Setup & Support by KENDRIS Capital
- Assistance with CSSF approval and fund registration.
- Drafting of regulatory documentation (Offering Memorandum, Limited Partnership Agreement, etc.).
- Ongoing fund management, administration, and compliance services.
Luxembourg SIF Factsheet
Key contact
Nikolas Charalambous
Managing Director
MBA, BSc. Accounting
Kyriacos Antonaki
Head of AML & Compliance
MBA, BSc. Economics
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