Establish a SIF in LuxembourgUpdated on Monday 07th November 2016
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Luxembourg is among the most attractive investment centers in Europe and also one of the leading networks for fund distribution in the world. In order to consolidate its position, the Government enabled the Specialized Investments Funds (SIF) Law which allows for special regulations related to eligible investors and assets. The Luxembourg SIF regulations were established in 2007.
The Luxembourg Specialized Investment Fund is a very flexible multi-purpose investment entity which also provides an efficient tax regime for qualified investors. Luxembourg SIFs can hold a wide range of assets, among which: private equity, hedge funds, real estate, listed securities and bonds.
Available types of SIFs in Luxembourg
The Luxembourg SIF can take several legal forms among which the common fund (FCP – fonds commun de placement) and investment company (SICAV – Société d’investissement à capital variable or SICAF – Société d’investissement à capital fixe). SICAV and SICAF companies may also take other forms, such as:
- public limited company (SA),
- private limited liability company (Sàrl),
- partnership limited by shares (SCA),
- cooperative in the form of a public limited company (SCoSA).
The Luxembourg FCP has no legal personality and must be managed by a management company which will act on behalf of the investors. The FCP is considered a Luxembourg SIF if its place of management is located in the country.
With respect to registration requirements, the Luxembourg SIF Law does not require a minimum or a maximum number of shareholders. However, the shareholders are required to subscribe a minimum share capital of 1,250,000 euros. Only 5% of the capital must be deposited upon the registration of the Luxembourg SIF.
Taxation of SIFs in Luxembourg
Luxembourg SIFs benefit from a very advantageous tax regime. Investment funds incorporated under the SIF Law are required to pay an annual subscription tax of 0.01% of their net asset value. Also, Luxembourg SIFs investing in other funds will pay the annual subscription once. Management services offered to SIFs are exempt from paying the VAT in Luxembourg. Additionally, foreign investors setting up SIFs in Luxembourg can also benefit from the country’s extended network of double tax treaties.