Luxembourg Reserved Alternative Investment Fund (RAIF)
General Overview
- Legal Basis: Governed by the Luxembourg Law of 23 July 2016 (RAIF Law).
- Regulatory Oversight: Not subject to direct supervision by the CSSF; indirectly supervised through its appointed Alternative Investment Fund Manager (AIFM).
- Target Investors: Professional and Well-Informed Investors.
- Setup Timeframe: The setup timeframe typically ranges from 4 to 6 weeks. However, this can vary based on the complexity of the structure, the preparation of documentation, and the involvement of various parties.
Key Features
- Corporate Flexibility: Can be structured as a common fund (FCP), an investment company (SICAV or SICAF), or a partnership (SCS or SCSp).
- Investment Scope: Can invest in all types of assets, including private equity, real estate, hedge funds, debt, infrastructure, and more.
- Quick Time-to-Market: No prior approval from the CSSF required, allowing for faster setup.
- Umbrella Fund Structure: Multiple sub-funds (compartments) can be created with separate assets and liabilities.
- EU Passporting Rights: Managed by an EU-authorized AIFM, enabling marketing across the European Union.
Taxation
- Tax Neutrality: No additional tax burden at the fund level.
- General Tax Treatment:
- SIF-Like Treatment (default): Exempt from Corporate Income Tax; subject to an annual subscription tax of 0.01%.
- SICAR Treatment (if opted for): Exempt from Corporate Income Tax on risk capital income; not subject to subscription tax.
- Limited Partnership Treatment (SCSp or SCS): Tax transparent, not subject to Luxembourg taxes at fund level.
- No Withholding Tax on distributions to investors.
- Tax Treaty Benefits: Potential access to double taxation agreements and EU Parent-Subsidiary Directive relief.
Governance & Service Providers
- Alternative Investment Fund Manager (AIFM): Mandatory appointment of an authorized AIFM (EU based).
- Depositary: Required to appoint a regulated Luxembourg based depositary.
- Central Administration: Must be performed in Luxembourg.
- Auditor: Must be a Luxembourg based approved statutory auditor.
Advantages of a Luxembourg RAIF Structure
- Regulatory Efficiency: No need for CSSF approval, ensuring a streamlined launch process.
- Flexibility in Asset Classes: Can invest in a wide range of asset classes, including alternative investments.
- Cost-Effectiveness: Lower operational and compliance costs compared to directly regulated Luxembourg funds.
- Investor Protection: Managed by an authorized AIFM under the AIFM Directive, ensuring investor safeguards.
- Scalability: Suitable for both single-strategy funds and multi-compartment umbrella structures.
- Attractive Exit Options: Can be structured as open-ended or closed-ended, offering investor liquidity flexibility.
Conversion & Setup Support by KENDRIS Capital
- Existing fund structures can be converted into a RAIF if compliant with the AIFM Directive.
- Assistance is available for structuring, registration, and operational setup.
Luxembourg RAIF Factsheet
Key contact
Nikolas Charalambous
Managing Director
MBA, BSc. Accounting
T +357 24 205300
