|Practical use||Highly regulated vehicle which can
be sold to all types of investors and
cross-border into any other EU
|Applicable legislation||Law of 17 December 2010
Part I (“UCITS Law”)
|Eligible assets||Restricted 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.
|Risk diversification requirements||Risk 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.
|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 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.
|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|
|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.
|Required Luxembourg service providers||- Management Company in case
of an FCP
- Depositary institution
- Administrative agent
- Registrar and Transfer Agent
- Independent auditor