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Private Equity Structures

Establishing a private equity company, fund or deal in Luxembourg.

 

Luxembourg has long been recognised as an attractive jurisdiction for structuring private equity companies, private equity funds and private equity deals.

The country is home to deals supported by institutions ranging from traditional private equity managers to venture capital managers and business angel investors, spanning asset classes and strategies such as infrastructure, fintech, biotech, blockchain and cryptocurrencies, and socially responsible investments.



Why Luxembourg?

 

Despite its relatively late start Luxembourg is now catching up fast with off-shore fund centres. The number of alternative investment managers who now choose Luxembourg for their investments, or even as a permanent base, is increasing.

Investors, fund promoters, private equity firms and family offices that choose Luxembourg as a base for their private equity companies and investments can select from a variety of different structures suited to their needs.

The most popular structures include the SOPARFI (Sociétés de Participations Financières), SLP (special limited partnership), RAIF (reserved alternative investment fund), the SICAR (Sociétés d'Investissement à Capital-Risque) and the SIF (specialised investment fund).



Key advantages

 

 Luxembourg is a particularly advantageous domicile thanks to its flexible legal and tax environment, with key benefits including:

  • No minimum capital for partnerships

  • Investors can incorporate a company by contribution in cash or in kind

  • Limited partnership vehicles can be incorporated

  • An external auditor valuation is not mandatory for all structures

  • Vehicles can be listed on the Luxembourg Stock Exchange or on any overseas stock exchange

  • Capital premium may be used

  • There is no specific debt/equity ratio

 

Special limited Partnership for Private Equity

 

The Special Limited Partnership is a form of companies which can be incorporated in Luxembourg by one General Partner (GP) and one Limited Partner (LP - investor).

  • It can be set up within 2-4 weeks
  • No prior regulatory approval
  • Unregulated Alternative Investment Fund under the AIFMD
  • Its manager should be regulated only when its AUM is over > 100 Mio (500 Mio for closed-end funds)
  • The SLP can invest in any type of assets: equities, participations, bonds, loans, artworks, cars, hedge fund strategies, liquid or illiquid instruments, real estate, private equity, etc.
  • No custodian required
  • No audit required
  • No prime broker required
  • Fully Tax transparent – fully tax exempt in Luxembourg – No VAT
  • Clearing and settlement of subscriptions with Euroclear - Fundsettle 

 

Contacts us for more information on setting up a private equity structure.

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