(ii) 1,250,000 Euros (within 12 months at the latest)
EU Pass
Yes / No [3]
Qualification as AIF
Yes
Exemption from AIFM Full Authorization (= registered small AIFM)
Yes [3]
Appointment of external approved AIFM
Required for / in AIFs that (i) do not manage themselves and (ii) whose AuM exceed the threshold of €500 million (unleveraged, without redemption rights) or €100 million.
SIF - Specialized Investment Funds
Designation
Specialized Investment Funds
Legal Source
SIF Law of February 13, 2007
CSSF – Financial Supervision
Yes (light-touch)
Investor Categories
Open only for Knowledgeable Investors [1]
Permitted Capital Investments
Open for all investments
Minimum Diversification
Yes
Legal Forms
SA (AG), SCA (KGaA), Sàrl (LLC), SCoopSA (Cooperative as AG),
SCS / SCSp (LP) Special Assets (FCP)
Sub-funds (Umbrella)
Yes
Necessary Financial Service Providers
Custodian (Bank)
Fund Administration (Accounting, Register management)
(ii) 1,250,000 Euro (within 24 months at the latest)
EU Pass
Yes
Qualification as AIF
Yes
Exemption from AIFM Full Authorization (= registered small AIFM)
No
Appointment of external approved AIFM
Always required
SPF
Designation
Private Family Wealth Management Companies
Legal Source
SPF Law of 11 May 2007
CSSF – Financial Supervision
No
Investor Categories
Open only for (i) Private investors (ii) Family Offices (iii) Financial intermediaries on behalf of private investors and/or Family Offices
Authorized Investments
Investments in financial instruments
No commercial activities, no real estate investments
Passive investments (without active control or management)
Minimum Diversification
No
Legal Forms
SA (AG), SCA (KGaA), Sàrl (GmbH), SCoopSA (Cooperative as AG)
Sub-funds (Umbrella)
No
Required Financial Service Providers
Generally none (subject to qualification as AIFM)
Equity Requirements
(i) at Foundation
(i) €30,000 (SA, SCA, SCoopSA) 12,000 Euro (Sàrl)
(ii) after Set-up
(ii) None
EU Pass
Generally: No [except for AIFM qualification / Opt-In or according to EU Prospectus Regulation]
Qualification as AIF
Generally: No [5]
Exemption from AIFM Full Authorization (= registered small AIFM)
Yes [3]
Appointment of external approved AIFM
Always required
Securitization
Designation
Commonly referred to as “SeCu”
Legal Source
Securitization Law of 22 March 2004
CSSF – Financial Supervision
No, except regular public issues (at least 4 per year) (Note: Issues for (i) Professional investors, (ii) Minimum investments of 100,000 Euro and (iii) Private placements do not qualify as public issues)
Investor Categories
Open for all types of investors
Authorized Investments
Securitization of any risks from claims, assets, liabilities, etc.
Minimum Diversification
No
Legal Forms
SA (AG), SCA (KGaA), Sàrl (GmbH), SCoopSA (Cooperative as AG), SNC (OHG), SCS / SCSp (KG) Securitization Funds
Sub-funds (Umbrella)
Yes
Required Financial Service Providers
Custodian (only with CSSF supervision)
Fund Administration (ACCG, Register management)
WP
(Securitization Funds:) KVG
Equity Requirements
(i) at Foundation
(i) €30,000 (SA, SCA, SCoopSA) 12,000 Euro (Sàrl) None (SCS/SCSp and Securitization Funds)
(ii) after Set-up
(ii) None
EU Pass
Generally: No [except for AIFM qualification / Opt-In or according to EU Prospectus Regulation]
Qualification as AIF
Generally: No [5]
Exemption from AIFM Full Authorization (= registered small AIFM)
Yes [3]
Appointment of external approved AIFM
Required for / in AIFs that (i) do not manage themselves and (ii) whose AuM exceed the relevant threshold
Regular Personal & Capital Companies
Designation
Commonly referred to as “LuxCo” or, depending on the legal form, “SA (AG), Sàrl (GmbH), SCA (KGaA) or SNC (OHG) and SCS/ SCSp (KG)
Legal Source
Commercial Companies Law of 10 August 1915
CSSF – Financial Supervision
No
Investor Categories
Open for all types of investors
Authorized Investments
Open for all investments
Minimum Diversification
No
Legal Forms
SA (AG), SCA (KGaA), Sàrl (GmbH), SCoopSA (Cooperative as AG), SNC (OHG) SCS / SCSp (KG)
Generally: No [except for AIFM qualification / Opt-In or according to EU Prospectus Regulation]
Qualification as AIF
Generally: No [5]
Exemption from AIFM Full Authorization (= registered small AIFM)
Yes [3]
Appointment of external approved AIFM
Required for / in AIFs that (i) do not manage themselves and (ii) whose AuM exceed the relevant threshold
[1] Knowledgeable investors are institutional investors, professional investors, as well as investors who have confirmed in writing that they meet the status of “knowledgeable investor” and who either (i) invest at least 100,000 Euros or (ii) have been assessed by a credit institution, an investment firm, an AIFM, or a management company that certifies their expertise, experience, and knowledge in the appropriate evaluation of a fund investment.
[2] Dependent on AIFM status
[3] Prerequisite: Fund assets (Assets under Management, “AuM”) below the relevant threshold of (i) €500 million - if unleveraged and without redemption rights within the first five years after initial investments - or for all other cases (ii) €100 million.
[4] Excluding SIF / SICAR, which collect capital from a number of investors to invest it according to a defined investment strategy for the benefit of these investors and which are not operationally active companies outside the financial sector.
[5] Excluding SPF / SeCus and LuxCos, which collect capital from a number of investors to invest it according to a defined investment strategy for the benefit of these investors and which are not operationally active companies outside the financial sector. SeCus remain exempt according to the explicit exemption provision of the AIFM Directive if they meet certain requirements (True sale, securitization of credit risks, etc.); in general, SeCus that refinance through bond issues remain exempt.
Tax Aspects
Regulated
UCITS
Tax Burden (Income & Business Tax)
None
Corporate Tax
None
Business Tax
None
Wealth Tax
None
Subscription Tax (Taxe d`abonnement)
Subscription tax of 0.05% p.a. on AuM (subject to reduced rate of 0.01% for certain assets)
Real Estate Levy
None
Capital Gains Tax [9]
None [9]
UCI
Tax Burden (Income & Business Tax)
None
Corporate Tax
None
Business Tax
None
Wealth Tax
None
Subscription Tax (Taxe d`abonnement)
Subscription tax of 0.05% p.a. on AuM (subject to reduced rate of 0.01% for certain assets)
Real Estate Levy
20% [8]
Capital Gains Tax [9]
None [9]
SIF
Tax Burden (Income & Business Tax)
None
Corporate Tax
None
Business Tax
None
Wealth Tax
None
Subscription Tax (Taxe d`abonnement)
Subscription tax of 0.01% p.a. on AuM (subject to exceptions)
Real Estate Levy
20% [8]
Capital Gains Tax [9]
None [9]
SICAR
Tax Burden (Income & Business Tax)
24.94% p.a. (Luxembourg City) Tax exemption for income from equity investments under the participation exemption Tax transparency for SCS / SCSp (taxation at the level of investors)
Corporate Tax
18.19% [= 17% plus solidarity surcharge of 7%] Tax exemption for income from equity investments under the participation exemption Tax transparency for SCS / SCSp (taxation at the level of investors)
Business Tax
6.75% p.a. (Luxembourg City) [According to municipal multipliers range from 6.75% to 10.5%] Tax exemption for income from equity investments under the participation exemption Tax transparency for SCS / SCSp (taxation at the level of investors)
Wealth Tax
Minimum wealth tax from EUR 535 to EUR 32,100 p.a., depending on balance sheet values and assets under management Tax transparency for SCS / SCSp (taxation at the level of investors)
Subscription Tax (Taxe d`abonnement)
None
Real Estate Levy
None
Capital Gains Tax [9]
None [9]
Unregulated
RAIF
Tax Burden (Income & Business Tax)
None For RAIF-SICAR see under SICAR
Corporate Tax
None For RAIF-SICAR see under SICAR
Business Tax
None For RAIF-SICAR see under SICAR
Wealth Tax
None For RAIF-SICAR see under SICAR
Subscription Tax (Taxe d`abonnement)
Subscription tax of 0.01% p.a. on AuM (subject to exceptions) For RAIF-SICAR see under SICAR
Real Estate Levy
20% [8] [Exempt for RAIF-SICAR]
Capital Gains Tax [9]
None [9]
SPF
Tax Burden (Income & Business Tax)
None
Corporate Tax
None
Business Tax
None
Wealth Tax
None
Subscription Tax (Taxe d`abonnement)
Subscription tax of 0.25% p.a. on (i) equity and (ii) borrowed capital exceeding eight times the equity
Real Estate Levy
None
Capital Gains Tax [9]
None [9]
Securitization
Tax Burden (Income & Business Tax)
24.94% p.a. (Luxembourg City), less refinancing costs (interest, capital commitments, etc.) Tax transparency for SCS / SCSp and securitization funds (taxation at the level of investors)
Corporate Tax
18.19% [= 17% plus solidarity surcharge of 7%] less refinancing costs (interest, capital commitments, etc.) Tax transparency for SCS / SCSp and securitization funds (taxation at the level of investors)
Business Tax
6.75% p.a. (Luxembourg City) [According to municipal multipliers range from 6.75% to 10.5%] less refinancing costs (interest, capital commitments, etc.) Tax transparency for SCS / SCSp and securitization funds (taxation at the level of investors)
Wealth Tax
Minimum wealth tax from EUR 535 to EUR 32,100 p.a., depending on balance sheet values and assets under management Tax transparency for SCS / SCSp and securitization funds (taxation at the level of investors)
Subscription Tax (Taxe d`abonnement)
None
Real Estate Levy
None
Capital Gains Tax [9]
None [9]
LuxCos - Partnerships [6]
Tax Burden (Income & Business Tax)
Corporate Tax
None
Business Tax
Typically: None except: (i) Commercial activities - or - (ii) Commercial character by GP in the form of an SA, SCA, Sàrl or SCoopSA with a 5%+ stake in SCS / SCSp
Wealth Tax
None
Subscription Tax (Taxe d`abonnement)
None
Real Estate Levy
None
Capital Gains Tax [9]
None [9]
LuxCos - Corporations [7]
Tax Burden (Income & Business Tax)
24.94% p.a. (Luxembourg City)
Corporate Tax
18.19% [= 17% plus solidarity surcharge of 7%]
Business Tax
6.75% p.a. (Luxembourg City) [According to municipal multipliers range from 6.75% to 10.5%]
Wealth Tax
0.5% p.a. (for assets up to EUR 500 million, 0.05% p.a. for higher assets) Minimum wealth tax from EUR 535 to EUR 32,100 p.a., depending on balance sheet values and assets under management
Subscription Tax (Taxe d`abonnement)
None
Real Estate Levy
None [8]
Capital Gains Tax [9]
15% (subject to participation exemption)
[6] SNC (Société en nom collectif, similar to Open Trading Company-OTC) and SCS / SCSp (Société en commandite simple / spéciale, similar to Limited Partnership-LP)
[7] SA (Société anonyme, similar to Public Limited Company-PLC), SCA (Société en commandite par actions, similar to Partnership Limited by Shares-PLS), Sàrl (Société à responsabilité limitée, similar to Limited Liability Company-LLC) and SCoopSA (Société cooperative as a public company, similar to Cooperative in PLC form)
[8] Companies in the form of an SA, SCA, Sàrl or SCoopSA, which invest directly or through transparent companies (partnerships) in Luxembourg real estate
[9] Withholding tax on dividend distributions (Note: Royalties for board mandates (Directorship Fees) are also subject to withholding tax, 20% of the gross royalties are to be withheld, declared and paid to the tax administration)
M&S Luxembourg advises domestic and international clients on local and cross-border corporate finance transactions, such as loan financing, secured transactions, loans, PECS, CPECS, profit-sharing loans, and acquisition financing, whether you are a borrower or a lender.
Our lawyers provide advice on structuring financial transactions and regulatory issues, draft and negotiate a full range of financing documents, and issue legal opinions.
Banking and finance law deals with the organization, ownership, and operation of banks and deposit institutions, mortgage banks, other providers of financial services regulated or licensed by state or federal banking regulatory agencies, and holding companies (“banks and other financial organizations”). It also includes representing banks and other financial organizations in credit transactions with borrowers and compliance with consumer protection and other laws regarding all aspects of financial services provided by banks and other financial organizations. Practices in banking and finance law vary from firm to firm. Comprehensive banking and finance law practice includes advice and representation not only in relation to loans and regulatory compliance but also in relation to fiduciary activities, securitizations, payment systems, electronic banking, data protection, and risk management. It also addresses mergers, organizational and ownership issues concerning holding companies, banks, and other regulated entities. Banking and finance practices often require and therefore often include specialized skills in handling litigation typical for banks, such as financial transactions and regulatory issues. Banking and finance lawyers continuously support their clients in responding to regulatory examinations and occasionally in resolving enforcement actions.
Our lawyers provide advice on structuring financial transactions and regulatory issues, draft and negotiate a full range of financing documents, and issue legal opinions.
For those currently wanting to work as a service provider, initiator, or investment advisor on international capital markets, they are faced with a very complex set of rules that unfortunately also contains many pitfalls. Since mistakes in the area of fund and capital market law can lead to significant penalties and, in the worst case, even the loss of the license, it is important to rely on experienced specialists when interpreting and implementing the legal requirements.
Fund Consulting
We advise you in particular regarding the legal requirements of the international environment in Luxembourg.
Therefore, when designing your fund, trust a partner capable of combining transparent design with legally compliant formulations. Our range of services includes the creation of:
legally secure risk information,
transparent forecast calculations/planned balances, and
robust contracts.
We develop tax and legal fund concepts and formulate them for you in a way that is suitable for prospectuses. Whether you want to commission us to create a complete fund prospectus or just need support on individual topics, we are at your disposal with our expertise and experience.
Rely on the expertise and experience we have acquired over many years.
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