Eternity Law International News The regulation of investment funds in Luxembourg

The regulation of investment funds in Luxembourg

Published:
April 6, 2021

A Specialized Investment Fund (SIF) is a structure that can invest in a wide range of assets. It normally qualifies as Alternative Investment Fund (AIF) and can be offered to qualified financial investors.

Eternity Law International offers investment fund in Luxembourg for sale and can also provide services of formation of investment fund in Luxembourg on your request. Contact us to discover more!

Legitimate system

SIFs are regulated by the Luxembourg Law of 13 February 2007 (SIF Law). The SIF system was amended by the Law of 12 July 2013 on Alternative Investment Fund Managers (AIFM Law). Accordingly, the SIF Law is presently separated into two sections: (I) general terms applicable to all SIFs, and (ii) explicit arrangements appropriate to SIFs which qualify as Alternative Investment Funds (AIFs) and which are needed to be managed by an approved Alternative Investment Fund Manager (AIFM). Because of the wide meaning of AIFs, most SIFs qualify as AIFs.

SIFs putting short-term investments and having distinctive or combined goals offering returns in accordance with currencies market rates or saving the estimation of the speculation should additionally conform to the requirements of The Regulation (EU) 2017/1131 on currency market funds.

There are some extra requirements that must be fulfilled at state as well as EU level (for example concerning AML, MiFID, market misuse, subsidiaries).

Legal form of the funds

The SIF might be established in various structures:

  • A fond commun de situation (FCP), for example a typical fund. The FCP has no legal personality and should be controlled by a Luxembourg the board organization;
  • A société d’investissement à capital variable (SICAV) or société d’investissement à capital fixe (SICAF), for example open- or closed-ended venture organizations with variable capital and fixed capital requrements.

The FCP or SICAV/SICAF might be set up as a fund or as an umbrella construction with different branches. The fund separately may have a limitless number of stakes/unit classes.

Authorisation

SIF should be approved by the Commission de Surveillance du Secteur Financier (CSSF) prior to starting its action. A while later, it is directed by the CSSF on a continuous premise for example through normal reporting. The CSSF charges a yearly costs for its administrative action.

The reports and data are ussually arranged and submitted to the CSSF with the help of lawyers  as well as a bank managers in Luxembourg.

The CSSF keeps a list of the approved SIFs that are dependent upon its oversight. A SIF may begin business when authorisation has been issued.

Capital base

The net resources of a SIF may not be not exactly EUR 1,250.000. This base should be reached inside a time of a year following its authorisation. Minimum 5% of the capital should be settled up at start.

Disclosure conditions and financial reports

SIF should set up a plan or offering brochure, a PRIIP Key Information Document (KID) if retail intestors can make investments, and a yearly report. There is no commitment to set up a semi-yearly report.

Arrangement of an AIFM

SIFs that qualify as AIFs are needed to choose an AIFM except if they benefit from the restricted exclusions given by the AIFM Law. SIFs qualifying as AIFs may either name an outside AIFM (the administration organization of the fund is delegated as AIFM) or decide to be inside managed. In the last case, the SIF will itself be considered as the AIFM and should fulfill all requirements of the AIFM Law.

Services providers

A typical fund should be controlled by a management organization, while a SICAV/SICAF may either act as self-managed. The administration organization of a FCP should draw up the administration guidelines for the common fund. Self-managed SICAV/SICAFs may just oversee resources of their own portfolio and may not oversee resources in the interest of other parties. The AIFM of a SIF should be located in Luxembourg.

A SIF should designate a Luxembourg depositary which is in addition to other things answerable for the supervision of assets. The qualified depositories are Luxembourg credit establishments, yet in addition Luxembourg financial companies satisfying certain prerequisites set by the Law of 5 April 1993 on the financial sector.

The heads of the SIF and of the depositary should have adequate and pertinent experience.

The yearly report should be reviewed by an approved independent inspector with professional  experience.

We have available investment funds in Luxembourg. Contact us  to find out more details.

Please feel free to join our telegram channel  in order to keep updated for the new offers and ready-made companies for sale.

Every week we have new jurisdiction to offer a ready-made turn-key solution! We work worldwide.

You can see our current offers in the categories “Cryptocoins and licensing of cryptocurrency operations”, “Ready-made companies”, “Banks for sale” and “Licenses for sale”.

You could be interested

SPI license in Sweden

Financial activities in Sweden require mandatory licensing. One of the two types of licenses intended for organizations with a monthly turnover of up to 3 million euros is the SPI. This business license is issued by the Finansinspektionen in Sweden. Our team offers highly qualified professional assistance in establishing and licensing companies around the world....

Company registration in Germany

By registering an organization in Germany, any business-person will be able to bring it to the international arena in the shortest time possible. Jurisdiction features Persons who are not residents of Germany or other states of the Eurozone can establish their own project only as a capital community, namely: Legal features of the registration of...

De-offshorisation

DEOFSHORIZATION: HOW NOT TO BANK AND PAY TAXES The development of tax legislation and cooperation between states on the exchange of information in this area significantly affects the work of offshore enterprises. Old structures, partnerships cease to bring positive results. The way out of the situation is deoffshorization. Increasingly, there is a need to provide...

Digital business license in Antigua

During the past few years, government apparatus of jurisdiction is trying in every possible way to contribute to the rapid economic development and expansion of the commercial spectrum of the country. As part of these efforts, a separate system was introduced for issuing licenses to conduct digital business-activities in jurisdiction. Digital business license in Antigua...

Company registration in France

More recently, France was ranked among those states that offer not the easiest conditions for the creation and development of commercial projects by foreign entrepreneurs. To remedy this situation, government agencies have focused all their efforts on laying a solid foundation for investors to act openly and freely. Now, France is trying to attract as...

Regulation of cryptocurrencies in Malaysia

In Malaysia, on January 15, the norms of a bill describing digital assets – cryptocurrencies – began to operate. This became known thanks to The Star. The publication appeared on January 14th. According to the text of the bill, citizens noticed in the unregistered distribution of cryptocurrencies through ICO, as well as in the creation...
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof

Kyiv

Baseina street, 7

London

Grosvenor Gardens, 52

Washington

1629 K St. Suite 300 N.W.

Vilnius

Gediminas Avenue, 44A

Tallinn

Kesklinna linnaosa, Tuukri 19

Edinburgh

Lochrin Square, 1

Nicosia

Jacovides Tower, 5 floor

Riga

Esplanade, 7 floor

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai

Singapore

Level 42, Suntec Tower Three, 8 Temasek Boulevard

Sydney

20 Martin Place

Porto

2609 Avenida da Boavista

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7