Investment fund in Luxemburg

Luxembourg opens up a wide range of tools for investors and founders that make it possible to receive high profits while keeping their funds completely safe. Foundations are very active in the territory of the duchy – structures of a regulated and unregulated formation. A regulated fund in Luxembourg for sale is a SIF-format structure that has its own specialization and is used to make individual decisions with a wide range of functionality. Opening such a structure is a procedure that requires special knowledge and experience. Eternity Law can help you with this, which provides services for the sale of licenses and businesses, accompanies the registration of such institutions, and provides professional advice.

Foundation in Luxembourg – their variations and structure

Foundations of a specialized formation have a clear orientation towards individual solutions, which distinguishes them from UCITS structures that have a private or public purpose. Among all the forms available to them, specialists in the overwhelming majority of situations prefer SIF, the creation of which is possible not only by individuals but also by investors, subject to confirmation of their professionalism. This structure has a complex organization, let’s say its uniform format or “umbrella” ramification. The benefits of the local financial sector are primarily in its flexibility and the possibility of a hassle-free choice of the optimal form of the fund for personal needs and requirements. SIF is able to appear:

• a general fund;
• an investment firm with variable or fixed capital;
• a structure with a closed/hidden composition and so on.

Investment fund in Luxemburg is able to accept investments in the form of various assets, both within the state and abroad – in this aspect there are no slightest restrictions. It is also permissible to place private funds, art objects and other things, including wine collections, in it. It is only important to follow the diversification requirements – the size of the asset should not exceed 30% of the total capital. Among other rules, it is worth highlighting:

• initial investment up to EUR 125,000;
• definition of the address, purpose, names and location of the directorate is obligatory;
• permits are required from the CSSF Commission;
• there is a need for a local management firm, a deposit bank and a certified auditor to check the annual accounts;
• one year after receiving the permits, the assets must exceed EUR 1.25 million;
• Luxembourg is necessarily identified as the place of registration of the central administration and head office;
• the abbreviation SIF is required in the name.

Liability for operations is limited to the extent of the claimed damage. It is possible to transfer some of the functions to non-residents of the state. The creation of investment fund in Luxembourg follows the next format:

• Limited partnerships and joint-stock companies – capital from 31,000 euros and more;
• LLC – at least 12,500 euros;
• Cooperative communities – there are no requirements for the least investment.

All SIFs are exempt from income tax and are not included in the European Interest Rate Directive. The single installment is 0.01% for the entire year. The base is the amount of net assets. Registration provides for a one-time payment of 1250 plus 75 euros. When personal shares are alienated within 6 months from the date of their purchase, domestic tax rates begin to apply to investors. Submission of reports is mandatory – the annual balance includes a balance sheet, including the tax cadaster, explanations and accounts for income/expenses.

Opening an investment fund in Luxembourg is a complex procedure with many nuances, requiring experience and remarkable professional training. Eternity Law specialists are ready to assist and support you in registering such a fund, and, in addition, we have many ready offers for sale. For additional advice on investment opportunities in Europe and other details about investment funds, please contact us.