Creatrust > Corporate > Private Equity Structure

Private Equity Structure

Structuring private equity investments and private equity firms

When it comes to structuring private equity companies, private equity firms and private equity deals, Luxembourg is recognised as a particularly advantageous jurisdiction thanks to its flexible legal and tax environment.

Investors, promoters, private equity firms, and family offices that opt for Luxembourg as a base for their private equity structure can choose between different structures:

SOPARFI (Sociétés de Participations Financières) is a vehicle dedicated to private equity deals. The SOPARFI can acquire private equity investments in an efficient tax manner with a minimal legal and administrative burden.
SLP (special limited partnership) which is a vehicle dedicated to co-investment, partnership investment. It is tax transparent and has become one of the most flexible and sought after company structures that promoters set up in Luxembourg.

Company Equity or Debt Instruments:

Promoters, investors and private equity firms may prefer Luxembourg for a variety of reasons:

no minimum capital for partnerships. The minimum capital for an S.A./S.C.A. is EUR 30.000 (minimum ¼ paid in) and for a S.à r.l. EUR 12.500 (fully paid in) and these can be represented in a non-euro currency
investors can incorporate the company by contribution in cash or in kind. No capital duty applies on incorporation
general partnership vehicles can be incorporated
an external auditor valuation is mandatory only for SA/SCA but not for a S.à r.l. or for partnerships
the vehicle's shares may be listed on the Luxembourg Stock Exchange (or on any stock exchange abroad)
capital premium may be used. Contributions must not necessarily be represented by an increase in capital or issuance of shares
no debt equity/ratio but an 85:15 ratio in some cases.

Each of the above mentioned vehicles is also allowed to issue any type of debt instruments providing opportunities for financing:

Convertible Preferred Equity Certificates (CPECs)
Preferred Equity Certificates (PECs)
Subordinated Notes
Convertible Bonds
Bonds
Warrants
Tracker Certificates
any other debt instruments