Theare two types ofthat can be formed in Luxembourg. They can take the form ofor as a. Investment companies can be formed as certain business entities in Luxembourg and the main differences between them will be given by the share capital.

Our lawyers in Luxembourg can offer you advice for different types of investments and information about the tax treatment of foreign investments in Luxembourg.

A SICAV (Société d’Investissement à Capital Variable) is a type of investment fund organized as an investment company that has a variable share capital. The value of its share capital must match at all time the value of its net assets. Increases and decreases of the capital can be made with no mandatory formalities.

The SICAV may be organized as a public limited company. The registered office for any type of investment fund must be located in Luxembourg. Any important documents are to be kept at the registered office and the issuance and redemption of share will also take place in that location.

The Grand Duchy of Luxembourg is a leading investment fund center in Europe. If you want to open a collective or specialized investment fund here, our team of financial experts can assist with information on the investment legislation and on the procedures involved when opening an investment fund in Luxembourg.

What are the characteristics of the SICAV?

The SICAV is subject to the Fund Law in Luxembourg (the 2002 Law and/or the SIF Law of 2007) and also the Luxembourg Commercial Company Law due to its structure, which is set up as a commercial company. This fund can either be managed by a designated fund management company or it can be a self-managed investment company, provided that the individuals running it qualify for this position.

Sub-funds may be created after a SICAV is operational, but each one must have a different investment policy. This fund structure does not need any formalities for increasing and decreasing of the company’s capital. The minimum capital requirement for such a fund is EUR 1,250,000 which must be deposited within six months after the fund has received approval for its investment activities in Luxembourg. Provided that the SICAV in Luxembourg is registered under the SIF Law, the company’s capital can be reached in a period of one year.

In the case of a self-managed SICAV in Luxembourg, it is necessary to know that, during the incorporation, the investors will have to deposit a minimum capital of EUR 300,000 (applicable in the case of funds registered under the UCITS Law). If the fund will be registered as an umbrella-fund, the same capital requirement applies.

What are the reporting requirements for a Luxembourg SICAV?

Funds in Luxembourg will need to observe the generally accepted accounting principles for annual and semi-annual reports. Any SICAV is supervised by the CSSF (Commission du Surveillance du Secteur Financier) and will have to fulfil its reporting requirements to this institution. Also, the CSSF will need to approve the constitutive documents of the fund, its directors, the management regulations and other issues before the fund is created. will need to observe the generally accepted accounting principles for annual and semi-annual reports. Anyis supervised by the) and will have to fulfil its reporting requirements to this institution. Also, thewill need to approve the, its directors, the management regulations and other issues before theis created.

The fund’s accounts have to be audited by an independent auditor and it is necessary to publish such documents in a period of maximum four months after the end of the financial year, provided that the fund operates under the UCITS regulations. If the fund is registered under the SIF Law, the documents can be published in a period of maximum six months after the end of the financial year. Investors must also be aware that the fund’s representatives are also required to provide a sale prospectus, which will offer information on the evaluation of the investment strategy that is carried within the fund, as well as the identified risks associated with this matter. This is necessary for all types of SICAVs in Luxembourg, with the exception of those that are registered as closed-ended funds, operating under the UCITS Law. What are the tax regulations for Luxembourg SICAVs? Businessmen who want to open a Luxembourg fund as a SICAV must know that this type of vehicle is liable for the payment of the subscription tax. This tax is imposed at a rate of 0.05% of the fund’s net assets and it is applicable on a yearly basis. In the case of SICAVs formed under the SIF legislation, the subscription tax is imposed at a lower rate, of 0.01%.

Funds in Luxembourg are exempt from the income tax. Furthermore, this type of Luxembourg fund can also benefit from a tax exemption on the net wealth tax and the withholding tax on the distribution of dividends paid to non-resident investors. The SICAV can benefit from certain double tax treaties, although this can be limited, if the other country does not have practical experience with the same financial instrument.

It is necessary to know that the SICAVs can benefit from the double tax treaties signed by Luxembourg based on the Circular Letter L.G. - A no. 61, signed on 12th of February 2015. Our team of financial consultants can advise on the tax treaties that are available for Luxembourg SICAVs.

No VAT applies for SICAVs in Luxembourg and our team of financial representatives may offer more information. The tax exemption on the VAT is applicable in the case of fund management services offered by a management company registered in Luxembourg; it is necessary to know that the provision of other types of services will be imposed with a VAT applicable at a rate of 15%.

What is the purpose of Luxembourg SICAV? Foreign businessmen who want to open a SICAV in Luxembourg should know that this type of vehicle is registered for the purpose of investing the fund’s share capital in liquid financial instruments, securities included; more importantly, this type of fund allows the mixture of various type of financial assets and thus, the SICAV can be incorporated for the purpose of investing in real estate, but it may also be formed as a securities fund or as a money market fund. Who is eligible for opening a SICAV in Luxembourg? When opening an investment fund in Luxembourg, the investors have to analyze the eligibility requirements, which can vary on the type of fund selected for registration. In the case of Luxembourg SICAV, the fund can be incorporated by any type of investor, as long as it is formed under the UCITS regulations. Other relevant aspects on SICAVs in Luxembourg Those interested in opening an investment fund in Luxembourg that will be set up as a SICAV should also take into consideration other aspects that are necessary for the proper functioning of this type of vehicle on the local market. For example, it will be necessary to respect the following: the SICAV’s registered office has to be in Luxembourg , as well as its place of management and control;

has to be in , as well as its place of management and control; it is also necessary to appoint a custodian, which is generally represented by a banking institution resident in Luxembourg ;

; the fund may issue shares at any time, with the mention that they may not exceed the value of the fund’s net assets ;

may issue shares at any time, with the mention that they may not exceed the value of the ; if the SICAV is registered under the UCITS regulations, any type of investors may set up this fund; however, under the regulations available for SIFs, the SICAV is available only for qualified investors. What are the obligations of the custodian bank in Luxembourg? As mentioned above, the assets of the SICAV in Luxembourg have to transferred to a custodian bank, which has the purpose of ensuring that the income of the fund is used as stipulated in the company’s articles of association. Provided that the assets of the fund are not properly managed, the custodian bank will become liable to both the investment fund and its shareholders.



What are the requirements for the issuance of shares? In a SICAV, the issuance of shares does not need any particular amendment in the fund’s constitutive documents. The price of a share will be established taking into account the net asset value (NAV) and the number of shares outstanding. Our team of financial specialists can offer more information concerning the manner in which the price of a share is established in a SICAV. What are the stipulations concerning the distribution of dividends? Regardless if the SICAV in Luxembourg is registered under the SIF or the UCITS legislation, the distribution of dividends follows the same regulations. Thus, it is necessary to know that the manner in which the distribution of dividends is concluded has to be prescribed in the fund’s prospectus. It is also necessary to know that the distributions can be allocated to the fund’s shareholders regardless of the financial result of the fund in a given period of time.

Investors in Luxembourg can open a), which is an, that has its own legal personality. The registration of ais done by opening a limited liability company – more specifically, a public limited company, that will have a share capital equal to its net assets. Theis one of the types ofthat can be set up inandthose interested in othercan explore more options when investing in this country.