Agefi Luxembourg - mars 2025

Mars 2025 23 AGEFI Luxembourg Fonds d’investissement W ith five years to go before the application of the FASTERDirective, what are the five key considerations for the investment fund industry? TheEUDirectiveonFasterandSaferRelief ofExcessWithholdingTaxes(FASTER)has beenofficiallyadoptedbytheCouncil of the European Union. This Direc- tiveaims tomakewithholding tax procedures safer and more effi- cient for cross-border investors, national tax authorities, and fi- nancial intermediaries. FASTER introduces a com- mon tax residence certifi- cate enabling investors to benefitfromfast-trackproce- dures to obtain relief from withholdingtaxesbywayofautomated digital tax residence certificates for thosedeemed tax resident in aMember State. Standardized reporting obligations will be intro- duced for financial intermediaries to enable tax au- thorities to trace the underlying transactions. While thisDirectiverepresentsabreakthroughforinvestors and fund managers, it also raises crucial challenges for the investment fund industry concerning the im- plementation as well as the operational execution of the newrules, whichwill apply from2030. What newrules does FASTER introduce? Avoidance of double taxation :As currentwithhold- ingtaxreliefproceduresareinconsistentacrossMem- ber States, this results in lengthy, costly and burdensomerelieforrefundproceduresoncross-bor- der investments, potentially creating double taxation for cross-border investors. The FASTERDirective in- troduces standardized tax relief procedures that aim to make the process more consistent within the EU, faster and less prone topotential tax leakage. Common tax residence certificate : A significant feature of the directive is the introduction of a common EU digital tax residence certificate (eTRC) that investors would use to benefit from the fast-track procedures to obtain relief fromwithholding taxes. Member States will provide an automated process to issue eTRCstoanaturalpersonorentitydeemed tax resident in their jurisdiction. It’s worth noting that while the eTRC isexpectedtostreamlineandspeedup withholding tax procedures by re- placingthepaper-basedprocessesstill used bymostMember States, indus- trymembershavenotedtheorganiza- tional impacts that the eTRC system willentail,aswellastheneedforamon- itoring and auditing framework to be implemented. Fast-track procedures : The Directive will allow Member States to have two fast-track proce- dures complementing the existing standard refund procedure forwithholding taxes: a) a “ relief-at-source ” procedure where the relevant taxrateisappliedatthetimeofpaymentofdividends or interest; b)a“ quickrefund ”systemwherethereimbursement of overpaidwithholding tax is grantedwithina short set deadline. The Council added provisions for indirect invest- mentswhere the investor invests througha collective investmentundertaking.Theseprovisionsensurethat legitimate investors such as certain funds or their in- vestors have access to the fast-trackprocedures. Standardized Reporting for Financial Intermedi- aries : In an effort to aidnational tax authorities inde- tecting potential tax fraud or abuse, financial intermediaries such as banks and investment plat- forms will have to adhere to standardized reporting obligations.A EuropeanCertifiedFinancialInterme- diary Portal will be established throughwhich large (andoptionally smaller) financial intermediaries reg- isteredintheirnationalregistercanbecertifiedtopro- vide the required documentation on underlying transactions to the tax authorities. What are the five key considerations for the investment fund industry? 1. Increase in cross-border investments : By making withholdingtaxproceduresmoreefficientandeasier toexecute,theDirectivefurtherencouragescross-bor- derinvestments,therebycontributingtotheobjectives oftheCapitalMarketsUnion.Thisopensupnewop- portunities for fund managers to attract more cross- borderinvestors,investinadditionaljurisdictionsand further expand theirmarket reach. 2. Increased compliance obligations : While the Di- rectiveaimstostreamlineprocesses,theinitialimple- mentation phase is likely to result in an increased administrative burden. Stakeholders will need to adapt to the new procedures and ensure that their systems and processes are aligned with the Direc- tive’s requirements. Standardized reporting obliga- tions must be adhered to and accurate records of transactions involving withholding taxes need to be maintained.Thisincludesverifyingthetaxresidency of investors and ensuring all necessary documenta- tion is in place. 3. Operational complexity : Implementing the new proceduresanddigitaltoolsrequiredbytheDirective may pose operational challenges. Certified Financial Intermediaries (CFIs), especially those involved in asset servicing e.g., custodian banks, will need to in- vestintechnologyandtrainingtoensuretheycaneffi- ciently manage withholding tax processes and complywith the newrequirements. As an illustration, industry members have raised concerns about the challenging new reporting obli- gations imposed onCFIs, whichmandate reporting within60 to90daysof payment dates. There is a sig- nificant amount of data their clientswill need to col- lect for that purpose, and having the right systems in place to collect and report the correct information within this shortwindowwill be a critical challenge. All stakeholders of the investment fund industry should expect a significant amount of work to up- date their internal processes, IT systems and data management systems to comply with the newpro- cedures anddocumentationrequirements. This rep- resents a significant undertaking and will impact several business functions (e.g., tax, operations, com- pliance, risk management, and service provider management, to name a few). 4. Risk of tax abuse : The Directive mandates robust risk management practices to monitor potential tax abuse. Stakeholdersmust ensure that all transactions are legitimate and comply with the Directive’s re- quirements.Member States can reject the registration ofCFIsiftheyareunderinvestigationfortaxabuseor havecommittedinfringementsofnationallegislation. 5. Get a head start and stay up to speed : While the 2030applicationdateofthisDirectivemaysoundlike alongwayahead,thedevilliesinthedetails.Therules are complex, exclusionsmight apply in certain cases, and knowledge of the newprocedures aswell as the impactoncurrentsystems,processesandprocedures will be extremely important to be ready in time. The investment fund industry must therefore begin preparingbyensuringtheyhaveanadequateunder- standingofFASTERanditsrequirements.Awareness and training sessions for resources to stay informed will be key over the nextmonths andyears. Next steps MemberStatesarerequiredtotransposetheDirective into national legislation by 31 December 2028, with thenationalrulesapplyingfrom1January2030.Faced withboth significant opportunities and implementa- tionchallengestocome,theinvestmentfundindustry can greatly benefit fromproactive preparation in an- ticipationof FASTER. Rosheen DRIES, EY Luxembourg Partner, Wealth and Asset Management Tax Leader Revving up for FASTER Could you introduce Ancile (Luxembourg) and provide anoverviewof its history? In2011,Ancile(Luxembourg)FundS.A.,SICAV-FIS launched the flagship sub-fund, SIDRA-ANCILE GLOBAL STRUCTURED TRADE IN- VESTMENT SUB-FUND (GSTIF) , investing globallyincommodityandtrade-basedtransactions. GSTIF provides secure and efficient financing for companies mostly in the Agriculture/Food sector, aimingforcapitalappreciationwhilemitigatingrisks throughdiversification. In 2014, we introduced two additional sub-funds: - SIDRA-ANCILE DECO INVESTMENT SUB- FUND (DECO) : Focused on private equity invest- ments in commodity-related businesses and infrastructure sectors, adhering to strict selection cri- teria.Whileitdoesnotinvestinrealestate,itmayhold security interests duringfinancing operations. -COMMODITYVALUECHAINSUSTAINABLE INVESTMENT SUB-FUND (CVCSI) : Initially a single-investor fund, it transitioned to a multi-in- vestor approach in 2023, specializing in ESG invest- ments. It received the LUXFLAGESGLabel in2024 and CSSF marketing approval in five countries in January 2025. Subsequent launches include: - SUSTAINABLE FOOD STRUCTURED FI- NANCE SUB-FUND (SFSF2018) : A single-in- vestor fund, developed with Credit Suisse , co-investingwith GSTIF. - ANCILE TRADE ACCESS PROGRAM SUB- FUND (ATAP 2022) : Launched with the UK DFI British International Investment (BII), this fund fo- cuses on short- to medium-term investments sup- porting real economy and physical trade flows exclusively in Africa . - ANCILE AGRI AND FOOD INVESTMENT SUB-FUND (AAFI 2022) : A single-investor fund established in collaboration with a reinsurance company. All of our funds are classified as Sustainable Fi- nanceDisclosureRegulation (SFDR)Article9 , en- suring a strong commitment to sustainability and impact-driven investments. What are your main missions and areas of ex- pertise? Since2011,wehavebeencommittedtofosteringsus- tainablegrowthbyofferingsecureandefficient cap- ital solutions, primarily to companies in the Agri/Food sector.We achieve this through collective and segregated investment vehicles, all of which in- tegrate our proprietary impact framework. The funds we manage focus on developing economiesworldwide,directingcapitaltolocal,non- speculative participants in commodity value chains. Byactingas a catalyst for local growth,we createop- portunities where both investors and investees ben- efit from tangible value creation and long-term performance. Ourapproachtofundingcommodityvaluechainsis not about supporting traders or speculators who profit from price fluctuations. Instead, we are dedi- cated to empowering real economy players who strengthen resilient value chains andgenerate apos- itive impactwithin their communities. What areAncile (Luxembourg)’s growthplans? In2025,Ancile(Luxembourg)planstoexpanditsin- vestment offerings with the launch of the European AgriTransitionFund(EATF)inthesecondhalfofthe year,targetinginstitutionalinvestorsacrosstheEU27. This initiative aligns with INOKS Capital’s broader strategy of supporting sustainable agriculture and food systems. Notably, the European Investment Fund (EIF) has already committed €40 million to INOKS Capital’s new EATF strategy This strategic partnership highlights the fund’s alignment with stringent environmental, social, and governance cri- teria,aimingtogeneratenotonlyfinancialreturnsbut also substantial positive impact. In parallel, Ancile aims to grow its CVCSI sub- fund, which focuses on ESG-driven investments. In2024, CVCSI received theLUXFLAGESGLabel, recognizing its commitment to responsible invest- ing. In January 2025, the fund also obtained CSSF marketing approval in France, Germany, the Netherlands, Italy, and Sweden, further strength- ening its market position. These initiatives reflect Ancile’scommitmenttoexpandingitssustainablein- vestmentportfoliowhilemaintainingrigorousselec- tion criteria and a strong regulatory framework. By leveragingitsexpertiseinimpactinvesting,ESG,and structuredtradefinance,Ancilecontinuestoposition itself as a key player in sustainable finance within Luxembourg andbeyond. What is your investment strategy? We alignwith the investment strategy of our invest- ment manager, INOKS Capital, which focuses on channelling capital into companies that generate a positive impact and contribute to more sustainable agriculture and foodvalue chainsworldwide. The investment objective of the SICAV is to achieve sustainable, above-average returns by investing in commodity and trade-based transactions. This is achieved through the granting of structured and se- cured funding to producers, consumers, and other participants in the commodity value chain, with a focus on capital appreciation, capital preservation, and riskmitigation throughdiversification. What is your expertise in fund administration? Our Luxembourg team brings 5 to 20 years of ex- perience in fund administration, which is however outsourced to local service providers in Luxem- bourg. Our primary focus is investment manage- ment ,specializingin impactinvesting,Sustainable Development Goals (SDG), and Environmental, Social, and Governance (ESG) principles . These values are at the core of INOKS’ Capital invest- mentphilosophy ,shapingourapproachtosustain- able and responsible investing. What do you think about the future of Luxem- bourg’s financial center? Luxembourghas awell-established reputation in fi- nancialservices,law,andregulation ,andwebelieve its prominence will continue to grow. The govern- mentandregulatorybodies remainhighlycommit- ted to upholding and enhancing the country’s positionasaleadingfinancialhub.Withastrongreg- ulatory framework, investor-friendly policies, and a forward-lookingapproach, Luxembourg iswell-po- sitioned to adapt to evolving global financial trends andmaintain its competitive edge. What are the main trends in the fund market for 2025, inyour view? In2025,weanticipate ESGandimpactinvesting will continue to gainprominence, drivenby investor de- mand, regulatory initiatives, and the global shift to- ward sustainable finance. However, a key challenge remainsthe properimplementationandauthentic- ity of these strategies, as ESG principles are some- times applied superficially. Ensuring transparency, accountability, and measurable impact will be es- sential tomaintaining credibility anddrivingmean- ingful change in the industry. What are your key objectives for 2025? Our keyobjective for 2025 is the successful launchof theEuropeanAgriTransitionFund(EATF),marking an important milestone in expanding our strategy onto a European platform.With over 20 years of ex- perienceinimplementingthisapproachglobally,we aim to leverage our expertise to establish a robust, scalable, and sustainable investment vehicle that alignswithEU institutional investor expectations. As said before, the EuropeanAgri Transition Fund (EATF) is designed to channel capital into compa- nies operating within sustainable agriculture and food value chains, particularly in the EU27 only, while maintaining the structured impact private debt approach that has been central to our success. Through this initiative,we seek toenhancefinancial inclusion, support real economic growth, and con- tribute to global food security by ensuring efficient and responsible capital allocation. Additionally, in 2025, wewill continue strengthen- ing and expanding our existing sub-funds, includ- ing CVCSI, which focuses on ESG-specific investments. Following its LUXFLAG ESG Label certification in 2024 and CSSF marketing approval in five European countries (France, Germany, the Netherlands, Italy, andSweden),weplan to further scale its impact and investor reach. Overall, our goal for 2025 is to solidify our presence in the European fundmarket, alignwith global sus- tainability objectives, and continue delivering risk- mitigated, structured, and high-impact investment solutions to our investors. Interview with Wim van VUREN, Ancile (Luxembourg) “Our goal is to solidify our presence in the European fund market”