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Investment Funding 2017-07-17T10:43:29+00:00

Funds Raising

Creating an investment fund is an interesting way of a non-bank external or alternative financing from investors as part of a fundraiser. With this form of financing, there is no repayment of the borrowed capital or related interest. Investors are remunerated on the capital gains realized on the resale of their holdings. Fundraising by creating investment fund does not require an input of personal guarantees. They provide a possibility to achieve a broader diversification among a number of different assets and thus spreading risks. Diversifying the investments can reduce the negative impact that an investment may undergo in a single asset class.

Investment funds Luxembourg automatically bring diversification to the portfolio, because they contain a large variety of titles. Also by pooling the capital, investors can share costs and benefit from the advantage of investing larger amounts. Another interesting point about investment funds is their liquidity. Investors have the advantage of getting their money back immediately, in case of open-ended schemes based on the Net Asset Value at that time. In case the LU investment fund is close-ended, it can be traded in the stock exchange, as offered by some schemes.

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UCITS

Undertakings for collective investment in transferable securities (UCITS) are pooled investment schemes, otherwise known as investment funds or mutual funds, which meet the criteria laid down under EU directives applicable in the field. UCITS benefits from a “European passport” which permits the underlying shares or units to be offered for sale throughout the European Union following authorisation of the fund in one Member State.

ELTIF

European Long-term Investment Funds (ELTIF) are the first concrete output from the European Commission’s work on long-term investments. This new form of long-term vehicle is well-suited for professional and retail investors. Its long-term nature is due to high capital commitments and the length of time required to produce returns. ELTIFS can provide a steady income stream for entities facing regular and recurrent liabilities.

Specialized Investment Funds

A Specialised Investment Fund (“SIF”) is a regulated, operationally flexible and fiscally efficient multipurpose investment fund regime for an institutional and qualified investor base. A SIF shall be any undertaking for collective investment located in Luxembourg whose sole object is collective investment of its funds in assets with the aim to diversify investment risks and to make its investors benefit from the results of its management of such assets.

SICAR

Regulated, on-shore, fiscally efficient and designed for private equity as well as venture capital investments : those are the core characteristics of the investment company in risk capital (Société d’Investissement en Capital à Risque – SICAR). It combines attractive tax status with light regulatory requirements. Investment policy of a SICAR is freely determined by the promoter, without any mandatory obligation or limitation.

Securitization Funds

Securitisation in Luxembourg is a tool, which enables the transferor (fund or company or special purpose vehicle – SPV) to acquire or assume risks linked to receivables, to any type of assets or to any commitment assumed by third parties or linked to activities executed by third parties. The securitization legal entity acquires or assumes such risk by issuing any type of securities the value and yields of which are linked to these securitised assets.

Special Limited Partnership

The Luxembourg Special Limited Partnership (Société en Commandite Spéciale – SCSp) combines a competitive tax environment with little regulation and great corporate flexibility. It may be set up with only two partners : at least one GP and at least one LP, for a limited or unlimited duration, does not require the intervention of a notary and is effective at the date of signature.

SOPARFI

The SOPARFI (Société de Participations Financières) is a fully taxable commercial company whose corporate purpose is limited to the holding of participation and related activities. A SOPARFI takes advantages of the participation exemption and may benefit from double taxation treaties signed by Luxembourg.

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