Fund Department

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Securitisation Undertakings

At the forefront of securitisation services in Luxembourg:

Creatrust works to secure and advance the interests of clients and to provide services that help them transform their assets and financial futures.

 

Our services are defined by the following:

  • In-house knowledge of all the major regulatory and development issues

  • Commitment to sourcing the most appropriate solutions for establishing and managing securitisation vehicles

  • Strong and open relationships with clients based on clear communication and trust

  • Independence

 

Complete cycle of securitisation in Luxembourg

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The Luxembourg law allows the securitisation of many types of assets, risks, revenues and activities and makes securitisation accessible to all types of investor (institutional or individual). Issuers will issue securitisation vehicles as an alternative to traditional bank funding.

  

Types of assets acquired by a Securitisation entity

 

Examples of assets acquired by a securitisation entity: 

  • Receivables, loans, mortgages, any future cash flow on sale of assets, current accounts

  • Bonds, shares, financial instruments, derivatives, currencies, precious metal, etc

  • Real Estate, planes, yachts, buildings, land, woods, plantations

  • Bank cards, car rentals, commercial, legal or political risks, catastrophe risks

  • Intellectual property, royalty income, future cash flow on activities, etc


Different Securitisation Entity's Forms

A Securitisation company can be incorporated in the following forms:

  • Public Company Limited by shares (SA or Société Anonyme)

  • Private Company Limited by shares (SáRL or Société à Responsabilité Limitée)

  • Limited Partnership  (Société en Commandite par Actions)

  • Cooperative companies limited by shares (Société Coopérative fonctionnant comme une Société Anonyme)

A Securitisation Fund can be incorporated:

  • as a stand-alone fund, which is a contract of co-ownership between the investors, and

  • a management company which has a registered office in Luxembourg.

Both undertakings can be used as a Special Purpose Vehicle (SPV) and can be set up as an umbrella structure, with segregated compartments enabling the same vehicle to be used for different securitisation transactions.

Tax framework

A Luxembourg Securitisation Company:

  • is subject to normal corporation tax at 29.2%

  • is not subject to wealth tax or incorporation duties on capital

  • will have all profits realized by the securitisation considered as normal taxable income,

  • However, all costs and commitments due to the undertaking shareholders and bondholders (or note holders) will be considered as tax deductible expenses. This means that only the remaining profits of the Luxembourg securitisation company will be considered as a taxable profit in Luxembourg.

A Luxembourg Securitisation Fund:

  • is considered tax transparent (Fonds Commun de Placement) and is therefore not subject to any taxation in Luxembourg. (The fund is not taxable itself and there is no withholding tax on payment to share or bond holders).

  • offers a profit to unitholders in the securitisation fund depending on their percentage of fund ownership.

 

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