Luxembourg Common Limited Partnership (SCS)

Benefit from high flexibility, tax efficiency, an investor-focused structure, cost-effective setup, and efficient transferability.

General Overview

  • Legal Basis: Governed by the Luxembourg Law of 10 August 1915 (Company Law) and the Law of 12 July 2013 on Alternative Investment Fund Managers (AIFM Law).
  • Regulatory Oversight: Not subject to direct CSSF supervision unless managed by an AIFM.
  • Legal Personality: Has a separate legal personality.
  • Target Investors: Institutional, professional, and private investors looking for flexible and tax-efficient fund structures.
  • Setup Timeframe: The setup timeframe ranges from 2 to 4 weeks, depending on the complexity of the structure and the preparation of documentation.
     

Key Features

  • Corporate Flexibility: Operates under a partnership agreement with broad structuring options.
  • Legal Structure:
    • Requires at least one General Partner (GP) with unlimited liability.
    • One or more Limited Partners (LPs) with liability limited to their contributions.
    • No minimum capital requirements.
  • Investment Scope: Suitable for private equity, real estate, venture capital, hedge funds, debt, and other alternative investments.
  • Quick Time-to-Market: No regulatory approval required; operational immediately upon registration.
  • Contractual Freedom: Terms and conditions fully customizable in the Limited Partnership Agreement (LPA).
     

Taxation

  • Tax Transparent: SCS is fiscally transparent and not subject to corporate income tax, net wealth tax, or municipal business tax in Luxembourg.
  • Taxation at Partner Level:
    • Limited Partners are taxed in their jurisdiction of residence.
    • General Partner may be subject to Luxembourg taxation if receiving management fees.
  • No Withholding Tax on profit distributions.
  • Potential Tax Treaty Benefits: Can benefit from tax treaties if structured correctly.
     

Governance & Service Providers

  • General Partner (GP): Responsible for fund management and decision-making.
  • Alternative Investment Fund Manager (AIFM):
    • Required if the SCS qualifies as an Alternative Investment Fund (AIF).
    • If appointed, enables EU passporting for cross-border fundraising.
  • Depositary Requirement: Only necessary if managed by an AIFM.
  • Central Administration: Must maintain books and records in Luxembourg.
  • Auditor: Not mandatory unless classified as an AIF.
     

 

Advantages of a Luxembourg SCS

  • No Direct Regulation: Not supervised by the CSSF unless managed by an AIFM.
  • High Flexibility: No restrictions on governance, investment strategy, or distributions.
  • Tax Efficiency: Full tax transparency and no withholding tax.
  • Investor-Focused Structure: Suitable for institutional, professional, and private investors.
  • Cost-Effective Setup: No capital requirements, no depositary needed (unless under AIFM Directive), and low compliance burden.
  • Efficient Transferability: LP interests can be transferred as per the LPA.
     

Use Cases

  • Private Equity & Venture Capital Funds
  • Real Estate Investment Vehicles
  • Debt & Credit Funds
  • Hedge Funds & Family Office Structures
     

Setup & Support by KENDRIS Capital

  • Assistance with structuring and registration of an SCS in Luxembourg.
  • Drafting of the Limited Partnership Agreement (LPA) and legal documentation.
  • Ongoing administration, management, and tax compliance services.
     

Luxembourg SCS Factsheet

Download

Key contact

Nikolas Charalambous
Nikolas Charalambous
Managing Director
MBA, BSc. Accounting
T +357 24 205300
Kyriacos Antonaki
Kyriacos Antonaki
Operations Manager
MBA, BSc. Economics
T +357 24 205300

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