The Main Functions of Investment Funds in LuxembourgUpdated on Friday 10th June 2016
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Investment funds in Luxembourg can take various forms and are established with the purpose of generating important turnovers. There are several types of investment funds established in Luxembourg, which is the most representative market in the European area in this sense. The first investment fund, set up in 1959, was incorporated in Luxembourg. Our team of financial representatives can provide legal advice on the functions of the local investment funds.
The functions of SIFs in Luxembourg
The specialised investment funds (SIF) are funds which address to well-informed and qualified investors. SIFs allow a higher level of flexibility related to the investment policies carried out by the investors; at the same time, the regulatory framework under which SIFs function is less strict, in comparison with other types of funds.
A SIF can be registered under the following structures:
• common investment fund (FCP);
• investment company with variable capital (SICAV);
• investment company with fixed capital (SICAF).
It is important to know that a SIF can be established under an umbrella-structure, which will allow the establishment of multiple compartments within the fund that can carry out different investment policies; our team of financial agents can offer more details in this sense.
The functions of UCIs in Luxembourg
Investment funds in Luxembourg can be set up as undertakings for collective investments (UCI), which can be further categorized in:
• undertakings for collective investment in transferable securities (UCITS);
• alternative investment funds (AIF).
One of the main utilities of the UCITS is that they allow the distribution in all member states of the European Union, once the fund received its authorization in the country in which it was established.
The rule is available under the European Passport, a measure imposed under the EU UCITS directive issued in 1985, which set out the basis for a common European market. The regulation, which was first imposed by Luxembourg, offers a high level of protection for the investor.
Entrepreneurs who need further information on the functions of the investment funds available in Luxembourg can address to our team of financial consultants for assistance.