Les investment vehicles are a smart way to structure your international financial projects. Luxembourg stands out for this, with its economic solidity, well-thought-out taxation and rules that adapt to your needs.

Why choose Luxembourg for your investment vehicle?

Luxembourg combines political stability and economic solidity, two key elements for structuring an international investment project safely.

Son flexible regulatory framework allows structures to be adapted to the objectives of investors, without excessive complexity. This attracts institutions as well as entrepreneurs.

The country offers a wide range of legal vehicles such as SOPARFI, RAIF or SIF, which adapt to different project profiles and regulatory levels.

Finally, his network of international tax treaties facilitates cross-border investments, while optimizing the overall taxation of your transactions.

The main types of investment vehicles in Luxembourg

Here are the main investment vehicles that you can use in Luxembourg, according to your profile and your objectives.

SICAV (Variable Capital Investment Company):

Is suitable if you are looking for an open-ended fund, especially in the context of a UCITS. It allows a great deal of flexibility in subscription and redemption.

SICAR (Venture Capital Investment Company):

For those who want to invest in unlisted projects with high potential. It is the structure dedicated to private equity.

SIF (Specialized Investment Fund)

For its part, it offers considerable flexibility for experienced investors. It allows you to diversify your assets while remaining within a streamlined regulatory framework.

RAIF (Reserved Alternative Investment Fund):

If you are looking for a quick set-up, the RAIF is an interesting option. It does not require CSSF approval, but must be managed by an AIFM, which guarantees a certain level of rigor.

SCsp (Special Limited Partnership)

It is ideal if you want a flexible, confidential structure and without legal personality. It is well suited for private equity investments.

FCP (Mutual Investment Fund)

Finally, the FCP operates on an asset co-ownership model. Like the SCsp, it is a structure without legal personality and is managed by a management company and adapts to different fund profiles.

Regulation and supervision of Luxembourg investment vehicles

Luxembourg investment vehicles evolve in a framework designed to secure international flows while offering great adaptability. La CSSF (Financial Sector Supervisory Commission) is the authority in charge of supervision: it issues approvals, controls practices and ensures compliance with transparency standards.

Not all vehicles are subject to the same level of regulation. There is a important difference between regulated, semi-regulated, and unregulated vehicles. For example, a SICAV or an SIF require prior authorization from the CSSF. A RAIF, on the other hand, escapes this direct approval, but remains under control via an approved manager. In contrast, an SCsp can operate without authorization or direct supervision, which offers more discretion, but requires careful structuring.

Each level of regulation involves reporting, compliance and internal control obligations, to be anticipated as soon as the fund is set up. These elements are among the questions to ask yourself when thinking about How to create an investment fund in Luxembourg.

Taxation of investment vehicles in Luxembourg

Luxembourg offers a competitive fiscal environment that reinforces the attractiveness of its investment vehicles. Depending on the structure chosen, taxation may vary, with optimizations possible at several levels.

One of Luxembourg's major assets is theExemption from income and capital gains tax for certain investment vehicles, such as SIF (Specialized Investment Fund) or the RAIF (Reserved Alternative Investment Fund). These structures do not pay tax on corporations or on gains made (for example, the sale of shares, bonds, or other assets). This maximizes the fund's returns, as no taxes are levied at the level of the structure itself.

In return for tax exemptions, most Luxembourg investment vehicles are subject to a annual subscription fee. This is calculated on the net asset value of the fund (total assets minus debts). The rates are very competitive, generally between 0.01% and 0.05%, depending on the nature of the fund and the assets it holds.

Luxembourg has signed more than 80 bilateral tax treaties with countries around the world, making it a strategic choice for cross-border investments. These agreements aim to avoid the double taxation on incomes such as dividends, the interests Or the capital gains. For example, if your Luxembourg fund receives dividends from a company based in Germany, withholding tax (often high) can be reduced or even eliminated, thanks to the agreement between Luxembourg and Germany.

The taxation of real estate income (rent, capital gains) depends on country where the property is located, in accordance with tax treaties. A Luxembourg vehicle, such as a SOPARFI or a dedicated fund, allowsoptimize flows by reducing withholding taxes and by facilitating the management of profits or exits. For example, a building in France is subject to French taxation, but a Luxembourg structure can minimize the overall fiscal impact.

How to effectively structure your investment vehicle in Luxembourg?

Here are practical tips for future investors who want to create a fund in Luxembourg.

Step 1: Define investment goals and investor profiles

Start by clarifying your goals: What type of assets are you targeting (real estate, shares, private equity)? Are you looking for short or long term returns? What is your risk tolerance? Then identify the investor profile: Are they institutional investors, wealthy individuals or a mixed party? This influences the structure chosen and the regulatory constraints.

Step 2: Choosing the right legal structure

Select the right structure:

SICAV: ideal for liquid investments (shares, bonds), accessible to various investors.

SIF (Specialized Investment Fund): flexible, for alternative assets, reserved for sophisticated investors.

RAIF (Reserved Alternative Investment Fund): similar to the SIF, but without prior approval from the regulator, for more speed.

SOPARFI: perfect for holdings, especially real estate, without investor restrictions.

Step 3: select service providers (management company, custodian, auditor)

Once these parameters have been set, select the right service providers: a management company (if necessary), a custodian, an auditor. Their reputation and experience with structures similar to yours can make a real difference over time.

Step 4: Prepare the required legal documentation

Finally, it will be necessary prepare all legal documentation: articles of association, prospectus, agreement between partners or fund regulations. This legal base guarantees the clarity of relationships between stakeholders and secures your arrangement in the long term.

Overlord's support in structuring your investment vehicle in Luxembourg

At Overlord, we help you structure your investment vehicle effectively, with a clear and personalized approach.

We start by analyzing your objectives: type of assets, strategy, specific constraints. Based on this, we guide you to the most appropriate legal structure.

We then connect you to specialized partners (notaries, management companies, accountants) to secure each stage.

Finally, we remain present throughout the project, until the operational implementation of your vehicle.

FAQ — Frequently asked questions

What is an investment vehicle in Luxembourg?

An investment vehicle is a legal structure (fund, company) used to combine and manage capital invested in assets (shares, real estate, private equity). In Luxembourg, these vehicles, such as the SICAV, the SIF or the RAIF, offer advantageous taxation, flexibility and a robust regulatory framework. example : A SICAV can invest in a portfolio of international shares for a variety of investors.

What are the advantages of a RAIF compared to an SIF?

The RAIF (For Sophisticated Investors only) is faster to create than the SIF (Specialized Investment Fund), as it does not require prior approval from the CSSF (Luxembourg regulator). It offers the same flexibility for alternative assets and similar taxation (income tax exemption). However, the RAIF must be managed by a licensed AIFM company, which can increase costs. example : A RAIF is ideal for quickly launching a private equity fund.

How does a SICAR work?

La SICAR (Venture Capital Investment Company) is designed to invest in risky assets, such as startups or companies undergoing restructuring. It benefits from advantageous taxation (exemption on capital gains from holdings held for more than 12 months) and is reserved for informed investors. It is less diversified than an SIF or RAIF, but more targeted. example : A SICAR can finance a technological startup with an exit horizon of 5 years.

What are the criteria for choosing between a SICAV and an SCsp?

SICAV: ideal for liquid assets (shares, bonds) and accessible to a wide audience. Perfect for diversified portfolios and high liquidity.

The SCsp: Special limited partnership, flexible, without legal personality, adapted to alternative investments (private equity, real estate) and tailor-made structures for informed investors.

Choose SICAV for simplicity and a large audience, SCsp for specific projects with fewer regulatory constraints. example : A SICAV for a bond fund, an SCsp for a real estate project.

Can you invest in a Luxembourg investment vehicle via life insurance?

Yes, many life insurance contracts, especially in France or Belgium, allow you to invest in Luxembourg funds (SICAV, SIF, RAIF) via units of account. This combines the tax advantages of life insurance (example: inheritance exemptions) with the flexibility of Luxembourg funds.

What is a real estate investment vehicle?

One real estate investment vehicle is a legal structure (fund, company, trust) designed to pool capital and invest in real estate, such as offices, homes, shopping centers or warehouses. It makes it possible to pool risks and effectively manage income (rents, capital gains). example : A real estate fund buys an office building to generate regular rents and added value on resale.

What is a private equity investment vehicle?

One private equity investment vehicle is a fund or a company that invests in unlisted companies (startups, SMEs, companies in growth or restructuring). He aims for high returns by taking stakes, often with an exit horizon of 5 to 10 years.

Structuring a Investment vehicle in Luxembourg offers real levers to optimize your international projects: legal stability, advantageous taxation, variety of structures and a framework designed for demanding investors.

But each project is unique. Choosing the right structure, anticipating regulatory obligations, and surrounding yourself with the right partners is essential to secure your assembly and maximize its performance over the long term.

At Overlord, we support you at every stage, from defining your strategy to operational implementation. If you plan to structure a fund or an investment company in Luxembourg, Make an appointment with an Overlord expert for a personalized analysis of your project.