Taxation of RAIF in Luxembourg

Taxation of RAIF in Luxembourg

Updated on Friday 02nd June 2017

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Taxation-of-RAIF-in-Luxembourg.pngThe reserved alternative investment fund (RAIF) in Luxembourg is a new type of investment vehicle available for both local and foreign investors, which provides a flexible and attractive legal framework. The RAIF has as the main advantage the fact that it comprises the main characteristics of an alternative investment fund with the ones of a SICAR in Luxembourg. Our team of financial representatives can offer more details on the benefits of the RAIF structure and can provide assistance on the taxation policies available in this case. 
 

Taxation scheme for RAIF in Luxembourg  

 
Regardless of the legal entity under which the RAIF is registered in Luxembourg, the fund will be required to pay the subscription tax, which is applicable at the rate of 0.01% of the fund’s net asset value
 
Foreign investors who want to start an investment fund in Luxembourg as a RAIF can also be exempted from paying the subscription tax in specific conditions. For example, the subscription tax is not applicable in the case of funds set up as: 
 
money market funds;
pension funds;
microfinance funds;
funds that invest in other funds which are liable to paying the subscription tax
 

RAIF as SICAR funds in Luxembourg  

 
As mentioned above, the RAIF can be set up as a SICAR in Luxembourg, which refers to an investment company in risk capital. In this particular case, the RAIF will be taxed following the regulations applicable to SICAR vehicles, on which our team of financial consultants can offer more details.  
 
The taxation scheme in this case will include the following: 
 
the fund will be exempted from paying the subscription tax;
it is liable to paying the income tax (however, certain exemptions may apply);
the investments in risk capital are to be audited. 
 
The fund may be set up following the regulations of a SIF in Luxembourg or a SICAR structure, which will allow the investors to establish umbrella funds. In this situation, the compartments of the umbrella fund can’t be liable to the subscription tax
 
Businessmen are invited to contact our team of financial agents for more details on the taxation of the RAIF.  
 

Comments

  • Alexander 2017-06-02

    Thank you for the article, now I understand better the provisions related to the subscription tax.

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