Specialised fund structures used by international asset managers, private equity sponsors and institutional investors within a stable regulatory environment.
Luxembourg has developed into one of the largest investment fund centres in the world, hosting thousands of funds used by international asset managers and institutional investors. The industry is supervised by the Commission de Surveillance du Secteur Financier (CSSF), the financial regulator responsible for oversight of regulated financial entities.
Luxembourg also implements European regulatory frameworks governing alternative investment funds, including rules applicable to Alternative Investment Fund Managers (AIFM) under the AIFMD.
| Parameter | RAIF | SIF | SICAR |
|---|---|---|---|
| Full name | Reserved Alternative Investment Fund | Specialised Investment Fund | Société d’Investissement en Capital à Risque |
| Governing law | Law of 23 July 2016 | Law of 13 Feb 2007 | Law of 15 June 2004 |
| Regulatory supervision | Indirect, via authorised AIFM | Directly by CSSF | Directly by CSSF |
| Regulator approval | Not required | Required | Required |
| Target investors | Well-informed | Well-informed | Well-informed |
| Minimum capital | EUR 1.25m / 12 mo | EUR 1.25m / 12 mo | EUR 1.0m |
| Investment focus | PE, real estate, infrastructure | Diversified strategies | Risk & venture capital |
| Legal forms | S.à r.l., S.A., SCSp, SCA | S.à r.l., S.A., SCSp, FCP | S.A., S.à r.l., SCA |
| Management | Authorised AIFM required | AIFM if qualifying as AIF | AIFM depending on structure |
| Tax treatment | Generally transparent with AIFM | Income-tax exempt (subscription tax) | Advantages for risk capital |
| Depositary bank | Yes | Yes | Yes |
| External auditor | Yes | Yes | Yes |
| Reporting | AIFM reporting (AIFMD) | Reporting to CSSF | Reporting to CSSF |
| Time to launch | Relatively fast | Longer (CSSF approval) | Longer (CSSF approval) |
| Typical investors | Institutional, asset managers | Institutional | Professional & VC funds |
| Typical use cases | PE, real estate, infrastructure | Diversified alternative funds | Venture & private equity |
RAIF has become particularly popular for its flexible framework and fast time to launch compared with fully regulated regimes. SIF structures remain widely used for diversified strategies, while SICAR vehicles are designed specifically for risk and venture capital investments.
Luxembourg is widely used for private equity and alternative investment structures. International sponsors establish Luxembourg entities to manage portfolio companies across Europe and beyond. Common structures include the SCSp (Société en commandite spéciale) partnership used by private equity funds, and RAIF structures managed by authorised AIFMs.
These let managers organise capital commitments from institutional investors, coordinate acquisitions and manage portfolio companies within a single legal framework — supported by an extensive network of legal, administrative and financial service providers concentrated in Luxembourg City (Kirchberg).
| Participant | Role in the structure | Typical institutions |
|---|---|---|
| AIFM | Portfolio and risk management, regulatory compliance under AIFMD | Authorised AIFM in Luxembourg or the EU |
| Depositary bank | Safekeeping of fund assets and oversight of cash flows | Luxembourg depositary banks (CSSF-authorised) |
| Fund administrator | Accounting, NAV calculation and investor reporting | Luxembourg fund administration firms |
| Management company (ManCo) | Operational management of the fund structure | Luxembourg management companies |
| External auditor | Independent audit of financial statements | Réviseur d’entreprises agréé (approved audit firms) |
| Legal advisers | Structuring the fund and preparing documentation | Luxembourg law firms |
| Regulatory authority | Supervises regulated funds and financial entities | CSSF |
Selection of the appropriate Luxembourg fund vehicle.
Legal structuring of alternative investment funds.
Creation of acquisition vehicles for fund investments.
Investment platforms structured across jurisdictions.
Coordination with Luxembourg fund administrators and advisers.
Organisation of governance structures for investment vehicles.
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