|Practical use||Investment funds which do not meet
the criteria set by the EU Directives.
|Applicable legislation||Law of 17 December 2010
Part I (“UCITS Law”)
The investment objective and strategy of the fund is subject to the prior approval of the CSSF
|Risk diversification requirements||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.
|Legal Form||- FCP
- SICAV (SA)
- SICAF (SA,SCA)
All of these entities must be open-ended.
|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.
|Net asset value (NAV) calculation and redemption policy||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.
|Corporate income tax||No corporate income tax|
|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.
|Wealth tax||No wealth tax.|
|Withholding tax on dividends / interests and capital gains||Not subject to withholding tax except
if EU Savings Directive 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.
|Benefit from the EU Parent Subsidiary Directive||No|
|Authorisation and supervision by the CSSF||Yes|
|Possibility of listing||Yes|
|European passport||No, unless it falls under the scope of the full AIFMD regime|
|Thin capitalization rules (debt-to-equity ratio)||Borrowing of up to 25% of net
assets without any restrictions are
|Required Luxembourg service providers||- Management Company in case
of an FCP
- Depositary institution
- Administrative agent
- Registrar and Transfer