The SICAV and the SICAF are two types of investment funds that can be formed in Luxembourg. They can take the form of Undertakings for Collective Investment of Transferable Securities (UCITS) or as a Specialized Investment Funds (SIF). Investment companies can be formed as certain business entities in Luxembourg and the main differences between them will be given by the share capital.
Our lawyers in Luxembourg can offer you advice for different types of investments and information about the tax treatment of foreign investments in Luxembourg.
The SICAV in Luxembourg
A SICAV (Société d’Investissement à Capital Variable) is a type of investment fund organized as an investment company that has a variable share capital. The value of its share capital must match at all time the value of its net assets. Increases and decreases of the capital can be made with no mandatory formalities.
The SICAV may be organized as a public limited company. The registered office for any type of investment fund must be located in Luxembourg. Any important documents are to be kept at the registered office and the issuance and redemption of share will also take place in that location.
The SICAF in Luxembourg
A SICAF (Société d’Investissement à Capital Fixe) is a type of investment fund in Luxembourg that has a fixed capital. It can be organized almost in every available business form in Luxembourg, among which:
- public limited company (S.A.),
- limited partnership (S.C.A.),
- limited liability company (S.a.r.l.).
Unlike in the case of a SICAV, the share capital of a SICAF can only be increased by the company’s shareholders and any changes to the capital must be notified and published.
The subscribed share capital of aSICAV or SICAF in Luxembourg must reach 1.25 million euros within six months after the company begins its activities. The timeframe for reaching the necessary capital is 12 months for Specialized Investment Funds (SIF).
The minimum share capital of the investment fund depends of the type of company chosen. Our lawyers in Luxembourg can provide more information about the minimum share capital according to the type of company.
The video below presents the main features of SICAFs and SICAVs in Luxembourg:
Other requirements for SICAVs and SICAFs in Luxembourg
These types of business entities are subject to the Commercial Law in Luxembourg and Company Law. They are supervised by the Financial Market Authority (CSSF) in Luxembourg. In both cases, a license is required in order for these funds to begin their activities.
According to law, SICAVs and SICAFs are exempt from corporate taxation. They are also exempt from the withholding tax on dividends. They are liable to the subscription tax, an annual tax rate of 0.05% of their net assets (0.01% if they are formed as SIFs). Investment funds in Luxembourg must prepare annual accounts and must appoint a Luxembourg auditor. Other advantages of these funds are that the persons or companies who administer them or perform consulting services do not need to have Luxembourg nationality.
For more information about investment opportunities in Luxembourg and other details about investment funds, please contact our team or lawyers in Luxembourg. We can provide more information about the investment policy.
Our local representatives in other countries, such as UAE, China, USA, Bulgaria and Cyprus, can help you with your legal issues.
We wish to know the fee schedules or professional fees to register one SICAF in Luxembourg.
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