Table of Luxembourg vehicles

Compare two vehicles:
 UCITSUCISIFSICARRAIFSPFSecuritization vehicleUnregulated SCS/SCSpSOPARFI
Practical useHighly regulated vehicle which can
be sold to all types of investors and
cross-border into any other EU
Member State.
Investment funds which do not meet
the criteria set by the EU Directives.
- Hedge funds
- Private equity and venture capital
- Real estate transactions
-Private equity and venture capital
transactions.
- Indirect real estate investments
Hedge funds, private equity funds, VC funds, real estate funds, infrastructure funds, microfinance funds, socially responsible funds, etc. Individuals wishing to optimize their
personal tax planning (private wealth management purposes).
- Securitization of a portfolio of
securities
- Securitization as structure for intra
group financing activities
- Real estate securitizations
Private equity, venture capital, real estate investments and any other alternative investments.The SOPARFI is frequently used as a vehicle for managing holdings in a group of businesses. As a holding company it offers, under certain well-defined conditions, the opportunity to mitigate or eliminate corporate tax in Luxembourg and Luxembourg withholding tax on dividends paid to EU and non-EU corporate shareholders, as well as to mitigate or eliminate foreign withholding tax on incoming dividends from EU and non-EU corporate subsidiaries (where a relevant DTT is in place).
The main benefits are :
• Attractive participation exemption regime
• Luxembourg’s extensive network of Double Tax Treaties
• EU directives transposed into Luxembourg law (e.g. the EU/parent/subsidiary directive and the EU interest Royalty directive).
Applicable legislationLaw of 17 December 2010
Part I (“UCITS Law”)
Law of 17 December 2010
Part I (“UCITS Law”)
Law of 13 February 2007 (“SIF Law”)Law of 15 June 2004 (“SICAR Law”)Law of 23 July 2016 ("RAIF Law")Law of 11 May 2007 (“SPF Law”)Law of 22 March 2004 (“Securitization Law”)Law of 10 August 1915 ("Company Law")Law of 10 August 1915 (“1915 Law”)
Eligible investorsUnrestricted.Unrestricted.Well-informed investorsWell-informed investorsWell-informed investors.Restricted to:
- natural persons acting in the context of the management of their personal wealth;
- management entities acting solely in the interest of the private wealth (e.g. trusts, private foundations); and
- intermediaries acting for the
account of the above mentioned eligible investors (e.g. bank acting under a fiduciary agreement).
Unrestricted.Unrestricted.Unrestricted.
Eligible assetsRestricted to:
- transferable securities;
- money market instruments;
- units of UCITS and/or UCIs;
- bank deposits;
- financial derivative instruments,
- ancillary liquid assets eligible up to 49% according to market practice; and
hedge fund indices.
Please note that the eligibility of the asset must be ascertained on a case-by-case basis in view of the applicable laws and regulatory practice.
Unrestricted
The investment objective and strategy of the fund is subject to the prior approval of the CSSF
Unrestricted.
Any kind of assets can be integrated or any type of investment strategies may be pursued.
Restricted to investments in securities representing risk capital.
According to the CSSF Circular 06/241, investment in risk capital is to be understood as the direct or indirect contribution of assets to entities in view of their launch, their development or their listing on a stock exchange.
The SICAR is not allowed to invest directly in real estate (except for its own use or through its participations).
Unrestricted, unless it invests in a portfolio of risk capital (such as a Sicar).Restricted to acquisition, detention, management and realization of financial assets.
The SPF is not allowed to carry out commercial activities or to hold directly real estate (except for its own use or through its participations).
Unrestricted.
Securitization of any kind of risks relating to claims, other assets, or obligations assumed by third parties or inherent to all or part of the activities of third parties.
Unrestricted.Unrestricted.
Risk diversification requirementsRisk diversification requirements are provided by articles 42 et seq. of the UCITS Law, e.g. (not exhaustive):
- a UCITS may invest no more than 10% of its assets in transferable securities or money market instruments issued by the same body;
- a UCITS may not invest more than 20% of its net assets in deposits made with the same body;
- the global exposure relating to derivative instruments does not exceed the total net value of the UCITS portfolio.
Risk diversification requirements are defined by IML Circular 91/75 (as amended by CSSF Circular 05/177). Such requirements are less stringent than the ones applicable to UCITS.
In particular, a UCI is not allowed to invest more than 20% of its net assets in securities issued by any one issuer.
Specific restrictions concerning funds adopting an alternative investment strategy are contained in CSSF Circular n° 02/80.
Risk diversification requirements are
defined by CSSF Circular n° 07/309.
Such requirements are less stringent
than the ones applicable to UCITS
and UCI.
In particular, a SIF is not allowed to
invest more than 30% of its net
assets in securities of the same type
of issuer.
No risk diversification requirements.Risk diversification requirements are aligned with those applicable to SIFs, unless the RAIF chooses to invest in risk capital only and such choice is mentioned in its constitutive documents.No risk diversification requirements.No risk diversification requirements.No risk diversifation requirements.No risk diversification requirements.
Legal Form- FCP
- SICAV (SA)
- SICAF (SA,SCA)
All of these entities must be open-ended.
- FCP
- SICAV (SA)
- SICAF (SA,SCA)
All of these entities must be open-ended.
- FCP
- SICAV (SA, Sàrl, SCA, SCoSA)
- SICAF (SA, Sàrl, SCA, SCoSA)
The entities may be open-ended or
closed-ended.
- SA
- Sàrl
- SCA
- SCS
- SCoSA
FCP
- SICAV (SA, Sàrl, SCA, SCoSA)
- SICAF (SA, Sàrl, SCA, SCoSA)
The entities may be open-ended or
closed-ended.
- SA
- Sàrl
- SCA
- SCoSA
A securitization vehicle may be set
up in the form of a company (SA,
Sàrl, SCA, SCoSA) or a fund
consisting of one or several coownerships
or one or several
fiduciary estates and managed by a
management company.
- SCS
- SCSp
- SA, Sàrl, SCA
-SCSp (special limited partnership)
-SCS (common limited partnership)
-SCoSA
Segregated compartmentsYesYesYesYesYesNoYesNoNo
Capital requirements- FCP:
EUR 1,250,000 to be reached within 6 months from the approval by the Luxembourg regulator.
- Self managed SICAV / SICAF:
EUR 300,000 at the date of authorisation and EUR 1,250,000 within 6 months following its authorisation.
- FCP:
EUR 1,250,000 to be reached within 6 months from the approval by the Luxembourg regulator.
- Self managed SICAV / SICAF:
EUR 300,000 at the date of authorisation and EUR 1,250,000 within 6 months following its authorisation.
EUR 1,250,000 to be reached within
12 months from the approval by the
Luxembourg regulator.
EUR 1,000,000 to be reached within
12 months from the approval by the
Luxembourg regulator.
- FCP:
EUR 1,250,000 to be reached within 12 months from the entry into force of the management regulations. - SICAV:
EUR 1,250,000 to be reached within 12 months from the incorporation of the SICAV.
Depends of the form:
- SA / SCA: EUR 31,000
- Sàrl: EUR 12,500
- SCoSA: no minimum capital
If the securitization vehicle is set up
as a company, it depends of the
form:
- SA / SCA: EUR 31,000
- Sàrl: EUR 12,500
If the securitization vehicle is set up
as a fund, there is no minimum
capital requirement.
No minimum capital requirement.Depends of the form:
- SA / SCA: EUR 31,000
- Sàrl: EUR 12,500
Net asset value (NAV) calculation and redemption policyThe UCITS must make public the
issue, sale and repurchase price of
their units each time they issue, sell
and repurchase their units, and at
least twice a month.
The UCIs must make public the
issue, sale and repurchase price of
their units each time they issue, sell
and repurchase their units, and at
least once a month.
At least once a year for reporting
purposes.
Not required. At least once a year for reporting purposes.Not required. Not required. Not required.Not required.
Corporate income taxNo corporate income taxNo corporate income taxNo corporate income taxGeneral aggregate ate: 24.94%

Income derived from transferable
securities (e.g. dividends received
and capital gains realized on the
sale of shares) is exempt.
Income on cash held for the purpose
of a future investment is also exempt
(for one year).
No income tax, unless investing only in risk capital, then SICAR tax regime applicable.No corporate income taxGeneral aggregate rate: 24.94%
Securitization vehicles should be
able to deduct from their gross
profits their operational costs and
the dividends or interests distributed
to the shareholders / creditors.
Therefore securitization companies
should not generate significant
taxable profits and should therefore
to a large extent be tax neutral.
No corporate income tax applicable.
Municipal busines tax of 6.75% applicable in very limited circumstances, namely in case the SCS
/SCSp (i) carries out a commercial activity or (ii) is deemed to carry out a commercial activity. A SCS/SCSp is deemed to carry out a commercial activity if its general partner is a Luxembourg public or private limilted liability company holding at least 5% of the partnership interests.
General aggregate rate: 24.94% (but dividends received and capital gains realised are exempt from income tax in case the conditions of the participation exemption regime are fulfilled)
Subscription tax- Rate: 0.05% of the NAV
- Reduction: 0.01% of the NAV in certain specific cases)
- Tax exemptions: special institutional money market cash
funds, special pension funds (including pension pooling
vehicles) and funds investing in other funds which are already
subject to subscription tax.
- Rate: 0.05% of the NAV
- Reduction: 0.01% of the NAV in certain specific cases)
- Tax exemptions: special institutional money market cash
funds, special pension funds (including pension pooling
vehicles) and funds investing in other funds which are already
subject to subscription tax.
- Rate: 0.01% of the NAV
- Tax exemptions: certain money market and pension funds or SIFs investing in other
funds which are already subject to subscription tax.
No subscription tax.- Rate: 0.01% of the NAV
- Exemptions apply.
Annual subscription tax of 0.25% on
the amount of paid up capital and
issue premium (if any).
No subscription tax.No subscription tax.No subscription tax.
Wealth taxNo wealth tax.No wealth tax.No wealth tax.No wealth tax.No wealth taxNo wealth tax.No wealth tax.No wealth tax.Rate: 0.5% of the NAV.
Withholding tax on dividends / interests and capital gainsNot subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax.Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax except
if EU Savings Directive applies.
Not subject to withholding tax. Dividends distributed by a
Luxembourg company are in
principle subject to withholding tax at
a rate of 15%, unless a domestic law
exemption or a lower tax treaty rate
applies.
Benefit from double tax treaty network- Limited to funds set-up in the form of a SICAV / SICAF only.
- Limited to certain double tax treaties.
- Limited to funds set-up in the form of a SICAV / SICAF only.
- Limited to certain double tax treaties.
- Limited to funds set-up in the form of a SICAV / SICAF only.
- Limited to certain double tax treaties.
Yes (only if the SICAR is set up as a
corporate entity, except SCS)
RAIF investing a portfolio of risk capital (such as a SICAR)
Access if set-up as a corporate entity (except if set-up under the form of a SCS/SCSp)
- RAIFs not investing in a portfolio of risk capital (such as a SICAR, but set-up as:
SICAV/SICAF: limited to certain double tax treaties (see circular L.G. A number 61 of the tax administration of 8 December 2017.
NoYesNoYes
Benefit from the EU Parent Subsidiary DirectiveNoNoNoIn principle yes, but certain jurisdictions where the target companies are located may challenge the application of the directive.No, unless RAIF that invests in a portfolio of risk capital (such as a SICAR).NoYesNoYes
Authorisation and supervision by the CSSFYesYesYesYesNoNoNo (unless continuous issues of
securities to the public)
NoNo
Possibility of listingYesYesYesYes, but difficult in practice.YesNoYesNo, unless it falls under the scope of the full AIFMD regime.Yes
European passportYes.No, unless it falls under the scope of the full AIFMD regimeNo unless it falls under the scope of the full AIFMD regimeNo, unless it falls under the scope of the full AIFMD regime.YesNo
No, unless it falls under the scope of the full AIFMD regime.Non-AIF, unless activities fall within the scop of article 1 (39) of the AIFM Law. No, unless it falls under the scope of the full AIFMD regime.
Thin capitalization rules (debt-to-equity ratio)Borrowing of up to 10% of net assets to finance redemptions (it should be a short term borrowing and cannot be for investment purposes) or to buy real estate for its business.
The total borrowing under the above
may not exceed 15% of net assets.
Borrowing of up to 25% of net
assets without any restrictions are
allowed.
No debt-to-equity ratio.No debt-to-equity ratio.No debt-to-equity ratio.Tax of 0.25% on the debt that exceeds 8 times the paid-up capital increased by the issue premium.No debt-to-equity ratio.No debt-to-equity ratio.No provision in Luxembourg law.
However the Luxembourg authorities use a 85/15 debt-to-equity ratio. If this ratio is not respected and an interest is paid on the excess debt on a loan, this may be considered as a hidden dividend
distribution subject to a withholding tax of 15% (such interest is then not deductible).
Required Luxembourg service providers- Management Company in case
of an FCP
- Depositary institution
- Administrative agent
- Registrar and Transfer Agent
- Independent auditor
- Management Company in case
of an FCP
- Depositary institution
- Administrative agent
- Registrar and Transfer
- Management Company in case
of an FCP
- Depositary institution
- Administrative agent
- Registrar and Transfer Agent
- Depositary institution
- Administrative agent
- Registrar and Transfer Agent
- Independent auditor
- Management Company in case
of an FCP
- Depositary institution
- Administrative agent
- Registrar and Transfer Agent
No- Management Company (if the
securitization vehicle is set up in the form of a fund)
- Independent auditor
- No depository institution (unless subject to approval by
the CSSF)
- No administrative agent (if managed by the securitization company itself)
For SCS:
- Alternative Investment Fund Manager (if the SCS/SCSp qualifies as an AIF).
- No requirement to appoint a depositary (except if the SCS/SCSp qualifies as an AIF and is managed by a duly authorised AIFM).

Independent auditor (depending on
the form of the company).