Luxembourg Specialized Investment Fund (SIF)

Benefit from a regulated yet flexible solution, broad investment scope, cost-effectiveness, EU passporting, and strong market recognition.

General Overview

  • Legal Basis: Governed by the Luxembourg Law of 13 February 2007, as amended.
  • Regulatory Oversight: Supervised by the Commission de Surveillance du Secteur Financier (CSSF).
  • Target Investors: Reserved for well-informed investors, including institutional investors, professional investors, and high-net-worth individuals.
  • Setup Timeframe: The setup timeframe ranges from 2 to 3 months, though it can vary depending on the complexity of the structure.
     

Key Features

  • Corporate Flexibility: Can be structured as:
    • Common fund (FCP) (managed by a management company)
    • Investment company (SICAV/SICAF) with variable or fixed capital
    • Partnerships (SCS/SCSp)
  • Investment Scope: No restrictions; can invest in private equity, real estate, hedge funds, debt, infrastructure, and other alternative assets.
  • Diversification Rule: No single asset may exceed 30% of the fund’s total assets (exceptions may apply).
  • Approval Process: Requires CSSF authorization before launch, but post-launch compliance is lighter than UCITS.
  • Umbrella Structure: Can create multiple sub-funds with distinct investment strategies.
     

Taxation

  • Tax Neutrality: Exempt from corporate income tax, municipal business tax, and net wealth tax.
  • Subscription Tax: Annual rate of 0.01% on net assets (some exemptions apply, e.g., pension funds, microfinance funds).
  • No Withholding Tax on distributions to investors.
  • Tax Treaty Benefits: May access double tax treaties depending on structuring.
     

Governance & Service Providers

  • CSSF-Regulated: Requires authorization and ongoing compliance.
  • Alternative Investment Fund Manager (AIFM):
    • Mandatory unless exempt (small AIFM regime).
    • If appointed, enables EU passporting rights for marketing to professional investors across Europe.
  • Depositary Requirement: Must appoint a Luxembourg-regulated depositary for safekeeping of assets.
  • Central Administration: Must be based in Luxembourg.
  • Auditor: A Luxembourg statutory auditor must be appointed.
     

Advantages of a Luxembourg SIF

  • Regulated yet Flexible: Provides investor protection with lighter ongoing regulatory compliance than UCITS.
  • Broad Investment Scope: Can invest in virtually any asset class.
  • Cost-Effective: Competitive tax treatment and ability to pool multiple strategies in an umbrella structure.
  • EU Passporting: If managed by an authorized AIFM, can be marketed across the EU.
  • Strong Market Recognition: Well-established framework widely accepted by institutional investors.
     

Use Cases

  • Private Equity & Venture Capital Funds
  • Real Estate Investment Vehicles
  • Hedge Funds & Debt Funds
  • Infrastructure Investments
  • Fund of Funds Structures
     

Setup & Support by KENDRIS Capital

  • Assistance with CSSF approval and fund registration.
  • Drafting of regulatory documentation (Offering Memorandum, Limited Partnership Agreement, etc.).
  • Ongoing fund management, administration, and compliance services.
     

Luxembourg SIF Factsheet

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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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