Luxembourg: Open various types of investment funds

Photo of author


Luxembourg is Europe’s leading investment fund hub. Luxembourg has worked hard to develop its regulatory framework, laws, and market strategies in order to create the best environment for investment and market expansion. Luxembourg’s leading position in Europe means that many foreign investors choose Luxembourg to open a mutual fund or another investment fund. Luxembourg is second in the world for the incorporation of a fund after the United States of America. Damalion provides you with Luxembourg soparfi from operational experts in the areas that are challenging your business.

Why should you open an investment fund for Luxembourg?

Luxembourg’s Grand Duchy of Luxembourg is small in comparison to its more powerful and important neighbours, France, Germany, and Belgium. The country has a large concentration of foreign workers, expats and investors. Multinational climate is helped by three languages, English being one of them.

What are the benefits of Luxembourg’s umbrella funds?

The umbrella fund, also known as multiple compartments fund, is available to a variety of vehicles that are registered in Luxembourg. These include RAIFs and FCPs as well as SICAVs and SICARs. An umbrella fund is a legal entity that allows investors to register multiple compartments as separate structures. They can also use the same legal entity to set up a fund with different distribution markets and investment strategies.

The umbrella fund, for example, can be used to invest in SIF structures. In certain circumstances, a compartment within the fund may also invest in other vehicles. The compartments are also flexible and can be either open-ended or closed ended. They may also issue unlimited classes of shares.

It is important to note that umbrella funds must be subject to the same tax regime as other SICAR funds. Our financial representatives can provide more information.

What are the other types of funds available in Luxembourg?

There are two other types of funds: the specialized investment fund (SIF), and the investment company for risk capital (SICAR). These are usually set up by experienced investors. The Luxembourg SIF can invest in many financial instruments such as bonds, private equity, and real estate.

What is the minimum capital requirement for a SICAV/SICAF Luxembourg company?

In terms of minimum share capital, the SICAV in Luxembourg and the SICAF Luxembourg have identical registration requirements. Investors who wish to establish a SICAV in Luxembourg or a SICAF Luxembourg must deposit a minimum amount of EUR 1.25million within six months after CSSF consented to the registration. If the fund is registered as a UCITS fund, this regulation will apply. The minimum capital required to set up a SIF fund will be the same, although investors can deposit it within 12 months.