The law on RAIFs has now been published in the Luxembourg Official Gazette (Mémorial). This new type of alternative investment fund (“AIF”) will solve all time-to-market issues due to the fact that it is not regulated itself and that cumbersome licensing procedures with the regulator are thus avoided.
It combines the legal and tax advantages of the fund regimes of the specialised investment funds (“SIF”) and the risk-capital investment companies (“SICAR”), without, however, being subject to direct regulatory supervision by the Luxembourg regulator (“CSSF”).
The key features of the RAIFs are as follows:
- public limited company (société anonyme - SA)
- special limited partnership (société en commandite spéciale – SCSp)
- partnership limited by shares (société en commandite par actions, SCA)
- common fund (fonds commun de placement - FCP) (without legal personality)
- common limited partnership (société en commandite simple - SCS)
- private limited liability company (société à responsabilité limitée - S.à r.l.)
RAIFs are subject to an annual subscription tax (taxe d’abonnement) at a rate of 0.01%, with several exemptions. Should a RAIF invest into risk capital investments, it is subject to the tax regime applicable to SICARs (it would be fully subject to tax except for risk capital income and gains). The VAT exemption on AIF management services also applies.
No doubt that a new success story in the Luxembourg fund industry has just begun!