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Open an Investment Fund in Luxembourg

Investment Fund in Luxembourg

Thanks to its advantageous geographical location in the heart of Europe and extensive experience with financial instruments, Luxembourg is in demand among entrepreneurs who decide to establish an investment fund in this country. It is the leading investment center in the EU and ranks second in the world after the United States. This is largely due to its well-developed legal framework, which combines a high degree of investor protection with flexibility in many other areas.

Luxembourg investment funds are popular among entrepreneurs as they can be intended not only for a wide audience but also for a limited number of investors through private placements. The regulatory authority for these structures is the Commission de Surveillance du Secteur Financier (CSSF).

Steps

01

Company Registration in Luxembourg

The creation of a fund usually begins with registering a management company. A limited liability company is suitable for this purpose, but other legal forms may also be used. The management company is registered in the same way as an ordinary operating company.

02

Opening a Bank Account

The company needs to open a bank account to deposit share capital and receive further investments. Account opening is a complex process that should be entrusted to professionals. It requires collecting a package of documents and conducting proper negotiations with the bank.

03

Contribution of Share Capital

The exact amount of share capital depends on the type of fund. If necessary, the beneficial owner must provide documents confirming the source of funds contributed as share capital.

04

Hiring Mandatory Staff

The company must have staff in key positions, and some of them must be local. We assist with sourcing and hiring staff.

05

Preparation of Investment and Other Policies, as well as the Investment Agreement

The main direction of the fund is determined by its investment policy. Investors contribute funds based on the investment agreement. Additionally, AML policies and other documents are required for fund establishment.

06

Application Submission

After preparing the company and documents, an application must be submitted to the regulator. Once submitted, you must be ready to respond to additional regulator inquiries. We will ensure timely and proper responses.

07

Registration of the Investment Fund

After successfully completing the previous steps, the fund is registered. Once registration is completed, the fund can begin accepting investments, which must be used strictly in accordance with the investment policy and the investment agreement.

What Are the Advantages of an Investment Fund in Luxembourg

Setting up an investment structure in this jurisdiction offers numerous advantages for entrepreneurs:

  • stability in politics and economy;
  • transparent and clear taxation of investment funds;
  • a sufficiently high level of protection of investor rights and interests;
  • attractiveness for corporate investors due to the jurisdiction’s credibility;
  • a well-established legal environment.

The strong reputation of the jurisdiction and its registered investment funds provides wide opportunities for operating in the EU and the European Economic Area, as well as for cooperating with leading international banks.

Taxation in this jurisdiction also deserves special mention. Essentially, specialized investment funds are not subject to taxation. Exceptions include:

  • a fixed registration fee;
  • a subscription tax of 0.05% of the net asset value of all fund assets.

No stamp duty is charged on the issuance or transfer of shares and units.

Types of Investment Funds in Luxembourg

The Specialized Investment Fund (SIF) is particularly popular among entrepreneurs. It is characterized by management flexibility and financial efficiency.

In fact, SIF investments are available to investors who meet one of two conditions:

  • willing to invest at least EUR 125,000;
  • able to prove they understand all risks associated with investments.

Since 2016, a law has been in force allowing entrepreneurs to register a new type of investment fund in Luxembourg — the Reserved Alternative Investment Fund (RAIF). It is available to all investors and authorized fund managers. The advantage of such a structure is that the CSSF does not require licensing. This also means there are no requirements for maintaining financial reporting.

Requirements for Investment Funds in Luxembourg

The own assets of an SIF must be at least EUR 1,250,000, and this amount must be reached within the first 12 months after licensing. Having a resident director or a physical office in Luxembourg is not required, nor are there minimum investor requirements.

If you decide to establish an investment fund in Luxembourg, it must have:

  • a custodian of assets;
  • a manager;
  • an administrator.

Auditors are also required.

If you are interested in setting up a Luxembourg investment fund, our company is ready to provide full legal support throughout the entire process. Our specialists will handle all legal matters and take responsibility for implementing your project. To contact our managers and proceed with opening a fund in Luxembourg, please use the contact numbers provided by our company.

Free initial consultation on legal issues, related to the daily activities of the business

Additional services

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Registration of investment funds in Czech

Today, businessmen are increasingly choosing the Czech Republic to establish an investment fund. It is a tool for implementing various business projects since it can help to improve the business reputation while paying minimal taxes. An investment fund in the Czech Republic offers businessmen a wide range of opportunities for doing business in the EU.

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Registration of investment funds in Malta

If you want to create an investment fund aimed at investors from European Union countries, Malta could be the right jurisdiction to register. The island is known as an innovative and reputable financial services center, and business people seek to establish an investment fund here to grow their capital. Since 1994, the activity of such structures is regulated by the Investment Services Act.

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Registration of investment funds in Switzerland

The opening of investment funds abroad is often of interest to those who already have a similar experience in other countries. Switzerland allows business people to start doing business on a completely different level, not only preserving but also increasing their capital. To achieve this goal, business owners often opt for this particular jurisdiction. Swiss funds are an excellent alternative to trusts — they allow for not only keeping assets but also increasing them.

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Frequently Asked Questions:

To establish an investment fund in Luxembourg, you need to prepare a business plan and policies, register a legal entity, open a bank account if necessary, and contribute the share capital. You must also confirm that the fund manager has sufficient experience. The fund must define conditions for attracting participants. All new participants must be registered in accordance with the fund’s rules and the country’s legislation.
The exact list of documents required depends on the type of fund. Typically, you will need to submit the founders’ personal documents, a draft investment agreement, the fund’s rules and conditions, and an AML policy.
The timeframe for opening a fund in Luxembourg depends on its type and usually takes several months.
The final cost of opening an investment fund in Luxembourg depends on the future investment directions, the type of participants, and other factors. You can learn the exact cost of opening an investment fund in Luxembourg by consulting our specialists.

Contact
info

+85281926676

info@incluence.net

Rm 7B, One Capital Place, 18 Luard Road, Wan Chai, Hong Kong

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