Why set up a fund in Luxembourg
The Fund industry in Luxembourg provides the finest fund structuring expertise, servicing capabilities and distribution access to launch and run your fund.
Luxembourg caters to the broadest range of investment strategies in a robust regulated framework with a competitive tax environment with models that are responsive to even the most demanding market developments.
Luxembourg is the biggest and best known domicile for investment funds in Europe and the second most preferred location for investment funds globally after the US. The Collective Investments Industry counts 15,000 funds with Assets under Management reaching 4.6 trillion dollars. The Luxembourg financial authority, the Commission de Surveillance du Secteur Financier (CSSF) is one of the major regulators in Europe and recognised internationally for a pioneering and flexible regulatory framework.
We have the specialist expertise and resources to support you to develop your investment funds, whilst meeting the legal and regulatory requirements. As a fully compliant & licensed entity, we offer a turnkey solution for fund managers, saving you going through costly and lengthy approval processes in addition to additional capital requirements.
Set up a fund in Luxembourg and enjoy the benefits
With a broad range of investment fund vehicles, there is a fund that will provide the flexibility required for your investment objectives
Luxembourg funds benefit from the EU marketing passport, when managed by Oneworld Plus Management (EU-based AIFM), to distribute freely to professional investors across the EU.
Luxembourg provides one of the finest regulated frameworks for funds and remains at the forefront of developments within the fund Industry
Luxembourg Funds can be listed on Luxembourg Stock Exchange and other recognized EU stock exchanges
Any dividend distributed to the unit holders is tax exempt
Luxembourg is the world’s largest cross border fund juristiction with its funds distributed across the world
Popular Fund structures
Luxembourg Specialised Investment Fund (SIF)
SIFs are regulated and tax efficient multipurpose alternative investment fund vehicles dedicated to all types of investments including plain vanilla, alternative, real estate and private equity investment strategies as well as innovative strategies in infrastructure, renewable energy, collectible assets, etc. A SIF is formed either in contractual form and consequently as an Investment Fund represented by a Managing Company (fonds commun de placement, FCP) or in the form of a company, namely as an Investment Company whose capital is variable (SICAV) or fixed (SICAR).
SIFs enjoy several tax advantages including exemption from capital gains tax for investors, annual subscription tax is as low as 0.01% of NAV (certain exceptions apply), the capital duty on incorporation is waived, and investor holdings are not subject to net worth tax. This specific fund structure accounts for nearly 40% of the Collective investments industry in Luxemburg as at the end of 2019 and was the most popular AIF structure until the introduction of the RAIF.
Luxemburg RAIF (Reserved Alternative Investment Fund)
RAIF structure was introduced in 2016 and combines features of the, until then, most popular fund structures in Luxemburg, namely SIF and SICAR. RAIFs are limited to well-informed and professional investors and is fit for diversification and multiple strategy activation through its “umbrella” structure with multiple compartments. This specific structure enjoys low subscription tax of 0.01% of the NAV.
RAIFs can be incorporated and launched with a simplified process (usually 4-6 weeks), since it is not supervised by the CSSF. RAIFs are subject to the provisions of the AIFMD and supervised by an authorized EU Alternative Investment Fund Manager (AIFM) and enjoys the benefits of marketing across the EU using the European Passport legislation.
The recently introduced RAIF structure appears to be the preferred choice for newly incorporated Funds. RAIF registrations have extended to almost 1000 by the end of 2019, achieving an increase of 120% in just 18 months.
An Undertaking for Collective Investment in Transferable Securities (UCITS) is an investment fund that invests in liquid assets that can be distributed publicly to retail investors across the EU.
A UCITS may be constituted in different forms:
A fonds commun de placement (FCP) is a common contractual fund. The FCP has no legal personality and must be managed by a Luxembourg management company;
A société d’investissement à capital variable (SICAV) or société d’investissement à capital fixe (SICAF) are open- or closed-ended investment companies with variable capital and fixed capital respectively. The creation of such a corporate entity requires the drafting of instruments of incorporation.
An FCP or SICAV/SICAF may be set up as a single fund or as an umbrella fund with multiple compartments. The fund and compartments respectively may have an unlimited number of share/unit classes, depending on the needs of the investors to whom the fund is distributed.
A UCITS must be authorised by the Commission de Surveillance du Secteur Financier (CSSF) before commencing its activity. Afterwards, it is supervised by the CSSF on an ongoing basis, e.g. by means of regular reporting requirements. The CSSF charges an annual fee for its supervisory activity.
UCITS can be managed by a Luxembourg management company or by a management company based in another EU Member State. A Luxembourg UCITS must appoint a Luxembourg depositary which is among other things responsible for the safekeeping of the fund’s assets.
Our AIFM Services
- Fund Accounting and Valuation
- Company Secretarial
- Internal Audit Services
- Risk Management
- Domiciliation and Office rental
- Direct and Indirect tax services
Oneworld Plus Management is a dedicated Alternative Investment Fund Manager (AIFM) providing third party AIFM services and fund formation to fund initiators, promoters and fund managers of private equity, real estate, infrastructure, debt, fund of funds, transferable securities as well as other alternative asset classes.
Oneworld Plus Management Ltd is licenced by CySEC under license no. AIFM35/56/2013.
Interested in setting up your fund in Luxembourg?
Contact us today and receive a complimentary consultation with one of our expert advisors.