Fund Liquidation in Luxembourg

Fund Liquidation in Luxembourg

Updated on Tuesday 04th June 2024

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Fund liquidation in Luxembourg is done following similar principles as the ones applied to commercial companies. The procedure starts with the voluntary liquidation of the structure, which is comprised of several steps. The participation of certain financial institutions is also required. 
 
Winding up a fund in Luxembourg is a complex procedure, therefore it is mandatory to appoint specialists who have the necessary legal and financial background to ensure a smooth process. For this, our team of financial advisors remains at your service. 
 

What are the steps involved in fund liquidation in Luxembourg? 

 
If you are the shareholder of an investment fund in Luxembourg and you need to close the fund, you will have to initiate a set of steps, which are mandatory for a voluntary liquidation procedure. The steps are the following:
 
  1. pre-liquidation – the Financial Supervisory Authority (Commission de Surveillance du Secteur Financier – CSSF) must approve the fund’s liquidator; 
  2. the board of directors sign a resolution for the dissolution of the fund, which is then sent to the shareholders, who will vote for the approval of the resolution;
  3. the shareholders will approve the liquidation of the fund and will formally approve the liquidator;
  4. a statutory auditor will be approved as well;
  5. the liquidation itself starts – the assessment of the assets is made, contracts are terminated, the liabilities are settled. 
 
The next step for fund liquidation in Luxembourg is to establish a final shareholders meeting, in which the liquidation proceedings are closed. During this phase, the shareholders will approve the report completed by the statutory auditor and once the auditor finished his/her responsibilities, he/she will be officially discharged from any other duties.  
 
Once these steps are completed, the fund must be deregistered from the registration authorities. The payment of various liquidation fees is done during this stage. The last stage is to submit a final report to the supervising authority, which is CSSF. 
 

What is the law applicable to funds in the process of liquidation? 

 
The legislation to close a fund in Luxembourg is applied following the same principles regardless of the fund, but there can be various differences from one fund to another. This can appear due to the fact that the funds can have different principles that regulate their activity (private equity in Luxembourg has different policies compared to a RAIF in Luxembourg, for instance).  
 
In the list below, our consultants present some of the regulations that apply in the case of those who own a SIF in Luxembourg. Specialized investment funds (SIFs) are supervised by CSSF and upon their liquidation, the following apply: 
 
  • the liquidation follows the rules of the Law of 13 February 2007 (Article 48);
  • the liquidator must be approved by the CSSF, as per the rules of the Article 49(1) of the Law of 13 February 2007;
  • during the winding up a fund in Luxembourg, the liquidator must submit financial statements and liquidator’s reports, in accordance with the Article 1100-14 of the Law of 10 August 1915;
  • the Law of 13 February 2007 also stipulates that the fund’s last depositary must make sure that the fund’s bank accounts must be maintained opened throughout the entire liquidation procedure, or to open new ones, if required (the same applies for a SICAR in Luxembourg in liquidation, as per the rules of the Law of 15 June 2004).  
 
Please know that investment funds in Luxembourg must also pay liquidation fees, which can vary based on the type of fund. For instance, for a SIF in Luxembourg or a SICAR, the annual fee is EUR 3,500. The fee is payable until the fund is deregistered. 
 
Our consultants can also help you close a SOPARFI in Luxembourg and you can rely on us of the liquidation of other funds, such as the SICAV or the SPF, therefore, do not hesitate to address us. We invite you to contact our team if you want to close a fund in Luxembourg.