Fund Redomiciliation in Luxembourg

Fund Redomiciliation in Luxembourg

Updated on Saturday 23rd September 2023

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Fund redomiciliation in Luxembourg refers to the legal procedure through which an investment fund incorporated and operating in a country is relocated to another country, in this case, Luxembourg. The procedure involves several compulsory steps, depending on the preferred pathway. 
 
Please mind that redomicilation implies that the fund will become a Luxembourg entity, in the sense that it will be a tax resident in this country, following the same procedures imposed in the case of those who opt to open a Luxembourg fund. 
 

What are the main options to relocate a fund in Luxembourg? 

 
There are several ways through which fund redomicilation in Luxembourg can take place, as per the applicable legislation in this country. In the list below, our financial advisors present the main 3 pathways:
 
  1. the transfer of the registered office of the foreign fund in Luxembourg;
  2. a merger of the foreign fund with a local investment fund or an investment company;
  3. contributions of the foreign fund’s assets to the new entity set up in Luxembourg. 
 
The method selected can be influenced by the legal entity of the fund operating abroad, and the legal entity that will be selected for registration in Luxembourg. For instance, the 1st option – the transfer of the registered office can apply for a SICAF in Luxembourg or a SICAV.  
 
It can’t be used for the common fund (FCP) which is a type of fund that is not incorporated as a corporate structure, as it is the case of the 2 entities presented above. The method of transferring the registered office is one of the most employed, as the procedure is rather straightforward. 
 
The main advantage of this option is that the foreign investment fund does not need to be closed and re-incorporated in Luxembourg, it is simply transferred here without any type of discontinuation. 
 
This is possible following the national commercial laws applicable in Luxembourg, which state that if a foreign entity has been previously incorporated abroad, and it relocates its headquarters to Luxembourg at any time after its incorporation, it will be considered a Luxembourg legal entity. 
 
Still, the procedure is not very simple when we refer to the paperwork that must be obtained and prepared and, therefore, we invite you to receive consultancy services from our financial advisors, who can offer personalized assistance on fund redomicilation in Luxembourg based on your current residency. 
 
Some of the steps for redomicilation in this case are: 
 
  1. amend the incorporation documents of the fund in accordance with the regulations applicable in Luxembourg; 
  2. amend the fund’s prospectus; 
  3. prepare the documentation to be reviewed by the CSSF (the Financial Supervisory Authority); 
  4. obtain an approval from CSSF; 
  5. obtain an approval from the fund’s investors on the redomicilation of the vehicle. 
 

What are the fees associated with the maintenance of a Luxembourg fund? 

 
Whether you opt to open an investment fund in Luxembourg or you want to redomicile one here, you will have to take into consideration various types of costs and fees associated with the procedure. In both cases, you have to address to relevant third parties, such as notaries or institutions. 
 
In each case, different fees can be charged for various types of services. In the list below, you can discover some of these fees: 
 
  • the services of a notary public vary from EUR 2,000 to EUR 5,000;
  • CSSF also charges fees (initial authorization fee and subsequent fees for each year of activity) which vary from EUR 4,000 to EUR 8,000, depending on the type of fund and number of compartments;
  • the legal fees for opening an investment fund in Luxembourg can go up to EUR 40,000 – EUR 60,000; 
  • management fees (for funds which require an AIFM) can vary from 0.03 to 0.12% on the yearly net assets of the fund.  
 
If you need further information on fund redomiciliation in Luxembourg, we invite you to contact our team of financial consultants.