Agefi Luxembourg - juillet août 2026

Juillet / Août 2026 25 AGEFI Luxembourg Fonds &Marchés By Frank van KUljK, Andy LI, Veronique SWAY&DarynaIVANIUTA,Loyens&Loeff T he typical legal formfor a private fund is a limitedpart­ nership. This is unsurprising as private fundmanagement origi­ nated in theUnitedStates, and this required a vehicle that supports their operatingmodel, ultimately settling on theDelaware limited partnership. Since then, investors and sponsors all over theworld have become familiarwith limited partnerships. For any jurisdiction seeking to attract pri­ vate funds, offering a limitedpartnership that resembles the Delaware model is therefore essential. As the industry knows, Luxembourg achieved this through its special limited partnership ( SCSp ), which is now firmly established in the market. Having such a tool avail­ ableisveryvaluable,butcertainsponsors, especially specific EU sponsors, may still have compelling reasons to use a corpo­ rate entity in the form of a Luxembourg partnership limited by shares ( SCA ) as their fund vehicle instead. Below, we focus on why the SCAshould be on the radar of private fundmanagers, how it compares to the SCSp, and which fundmanagers,investmentstrategiesand investors may find it appealing. We also consider, more holistically, how to ensure that an SCAcan in practice function as a genuine investment fund: taxneutral, with workable distribution mechanics, andoffering investor confidentiality. First, why is anSCSp such a great fit for organizing a Luxembourg fund? An SCSp offers ample contractual free­ dom regarding governance, commercial arrangementswithinvestorsandtheallo­ cation and distribution of income. The general partner ( GP ) retains virtually full control over the partnership’s manage­ ment.AnSCSpdoes not publiclydisclose itsinvestorsandfundterms,anditsfinan­ cial statements are not publicly accessible. Subject to rare exceptions, an SCSp is “looked through” for Luxembourg tax purposes and is tax neutral if it acts as a private fund. This “lookthrough” ap­ proach also applies under the tax laws of manyforeigncountries,includinginvestor jurisdictions (which then regard the in­ vestors as the direct owners of the SCSp’s assets) and investee jurisdictions (which then regard the investors rather than the SCSp itself as the taxownersof theSCSp’s assets).Suchlookthroughstatusmaygive rise to tax efficiencies, depending on the investor and investee jurisdictions. If anSCSp is so great, whatmay prompt the use of a Luxembourg corporate fundvehicle (SCA) instead? Fund sponsors that focus on commit­ ments from EU family offices and EU highnetworthindividuals(HNWI)often useSCAsasinvestorfacingvehicles.This islargelydrivenbyfamiliarity:thesetypes of investors are usually more familiar with corporate vehicleswith sharebased participationratherthanpartnershipstyle interests. EU family offices and HNWI oftengravitate,morethanotherinvestors, towards secondary strategies, which avoid the Jcurve and fundoffunds strategies, which offer strong diversifica­ tion despite smaller commitments. It is therefore no coincidence that such strate­ giesareoverrepresentedamongfundsre­ lying on the SCA as legal form. Also, openended private fund strategies usu­ ally opt for a corporate vehicle to accom­ modate unitization through shares. The drivers for using SCAs are not lim­ ited to familiarity. Certain fund sponsors prefer to organize their Luxembourg fund as a corporate vehicle because such corporate form may come with tax effi­ ciencies and/or tax compliance benefits dependingon the investor or investee ju­ risdictions. An SCA is the goto Luxem­ bourg vehicle for such cases. These tax benefits are usually a consequence of the fact that theSCAis generallynot “looked through”forforeigntaxpurposes.Infact, the SCAis typically seen as the owner of the assets from both the investor and in­ vestee tax perspective. Asanexample,anSCAasanaccesspoint to a wider fund complex paves the way for more efficient tax treatment for investors that areonboarded throughe.g. Dutch or Belgian private wealth pooling vehicles, depending on the specifics of the case. As explained above, EU family offices and HNWI in particular demon­ strate appetite for secondary and fund­ offunds strategies, and as such parties often come in private wealth pooling vehicles, managers of such strategies often consider the use of SCAs. These SCAusually subject themselves to theRAIF regime, why is that? As explained above, an SCAmay secure taxandtaxcompliancebenefitsatinvestee and/orinvestorlevel,butitisafullfledged Luxembourg taxpayer and could there­ fore cause a substantial Luxembourg tax dragonportfolioperformance,which is a showstopper for organizing a fund as an SCA.Inaddition,anSCAissubjecttocor­ porate lawdriven contribution and dis­ tribution restrictions including notarial involvement and interimaccounts for in­ stance, which would undermine its use­ fulness as a fund vehicle. However, the Luxembourg reservedalternative invest­ ment fund ( RAIF ) regime, which can be adopted by an SCA, provides a solution for those tax and corporate lawdriven concerns. Howadoptionof theRAIFwrapper fixes the SCA’s key legal and tax drawbacks as a fundvehicle IfanSCAsubjectsitselftotheRAIFregime (commonly referred to as “adopting the RAIF wrapper”), Luxembourg taxes are de facto switched off. The RAIF can either (i) opt for a regime to switch off all Lux­ embourg taxes except for a subscription tax of 1bps on itsAUMper year ( Regular Exemption ) or (ii) opt for a regime to be subject to Luxembourg corporate income tax,butwithanexemptionforincomeand gains from securities representing risk capital ( Risk Capital Exemption ). If the SCARAIFholdsonlyassetsqualifyingas securities representing risk capital within themeaningoftheRAIFlaw,thelatterop­ tion effectively entails full tax neutrality. SelectingtheappropriateLuxembourgtax regime for an SCARAIF requires careful consideration.While theRegular Exemp­ tion is more commonly used, the Risk Capital Exemption may be preferred by certain investors to accommodate their specific tax position. The downside of the RiskCapital Exemption is that the RAIF’s assets must be annually screened against theriskcapitalcriteria,whichrequiresau­ ditor involvement. In certain cases, the screening is done on a dealbydeal basis toavoidsurprisesatyearend,whichcould potentially invalidate theRiskCapital Ex­ emption. Screening can be particularly challenging for fundoffunds strategies, as it may entail a lookthrough analysis down to the portfolio funds’assets. The choice for the type of tax exemption must bemade in the SCA’s articles of as­ sociation ( Articles ) and is in practice challenging (but not impossible) to change once investors have been on­ boarded. Any amendments to the Arti­ cles must be passed before a notary and come with a shareholder quorum of at least 50% and approval by twothirds of the votes cast. Changes are sometimes prompted by investor demand, espe­ cially where such investors participate through private wealth pooling vehicles which are better off taxwise if the SCA applies the Risk Capital Exemption rather than the Regular Exemption. TheRAIFregimenotonlyswitchesoffthe general tax rules at the SCAlevel but also allows it to opt for a variable share capital model. Under such model, the above­ mentionedcorporatelawdrivencontribu­ tionanddistributionrestrictions,aswellas related formalities, no longer apply to an SCAstylefund.AnSCARAIFthenfunc­ tions as a socalled SICAV, where “V” stands for variable capital. In terms of its capitalposition,anSCASICAVRAIFonly needs to monitor the RAIF law’s mini­ mumcapitalrequirementofEUR1.25mil­ lion (subject to a 24month rampup period) andnoother corporate share cap­ ital variation formalities are applicable. Hence the RAIF status is a tax and legal necessityforanSCA,andalsocomeswith the option to structure separate compart­ ments,eachofwhichcanfunctionasasep­ aratefundwithinthesamelegalshell.The tax exemptions referred to above apply at the RAIF level and cannot differ between compartments. Provided the fund docu­ ments allow for it, launching such com­ partments typically requires a mere GP decision (without notarial involvement). RAIF status is amusthave for a private fund type of SCA, does it also comewithdownsides? The RAIF regime does not impose a meaningful incremental compliancebur­ den, although an SCARAIF relying on the Regular Exemption is subject to risk­ spreadingrules.Asamatterofregulatory practice, exposure toa singleasset isgen­ erally capped at 50%, with a 70% thresh­ old for infrastructure assets. These diversificationrules areusuallynot prob­ lematic as they are much lighter than whatistypicallycommerciallyacceptable in a private fund. However, when the goal is to accommo­ date a single coinvestment, the diversifi­ cation rules would render the use of a RAIFwiththeRegularExemptionimpos­ sible while a RAIF with Risk Capital Ex­ emption remains a possibility if the underlyingassetqualifiesasriskcapital.A RAIF must have its financial statements audited, but this should not be viewed as anincrementalburden,asauditsarestan­ dardpractice for private funds. To adopt the RAIF regime, an EU autho­ rized alternative investment fund man­ ager ( AIFM ) must be appointed. In practice, this isusuallynot amaterial con­ straint: sponsors may hire a thirdparty AIFMor rely on an inhouse EUAIFM. If the AIFM is not Luxembourg based care should be taken that the nonLuxem­ bourg, but EUAIFMdoes not create tax­ able footprint for the SCARAIF outside Luxembourg. The RAIF regime also re­ quires investors to qualify as “wellin­ formed investors” for onboarding pur­ poses. Much can be said about that definition,but,inessence,anyinvestorin­ vesting at least EUR100,000 canqualify. Howtomanage public disclosure concerns if a SCA is used as a private fund? Apotential concern that comes with the use of an SCA is the public disclosure of thekeyfundtermsthroughtheSCA’sAr­ ticles. To solve this concern, the Articles usually contain only generic corporate governance provisions, while the core confidential fund terms are set out in a privateofferingmemorandum.Theoffer­ ing memorandum provides for its own amendmentmechanics,whichlargelyre­ semblethosecommonlyseeninanSCSp, meaning that the GP can unilaterally make changes that do not materially im­ pact investors, while investor consent, by majorityorsupermajority,isonlyneeded formaterial changes. Such mechanics eliminate the need for Luxembourgnotarialinvolvementtoalter most of the commercial terms, since changes made in an offering memoran­ dum do not require such involvement, whereasamendmentstotheSCA’sarticles do. Toensure that the core terms in theof­ fering memorandum are binding on the investorsandtheGP,thesubscriptiondoc­ uments of an SCA provide that the in­ vestors subject themselves to the fund termscontainedintheofferingmemoran­ dum by submitting their executed sub­ scriptiondocuments. From a confidentiality perspective, it is worth noting that, unlike an SCSp, an SCAmust file financial statements with the Luxembourg company register, wheretheybecomepubliclyaccessible.In practice, this aspect is, however, not seen as a drawback that creates strong mo­ mentum in favor of the SCSp. An SCA­ RAIFrequiresanannualreport,including financial statements prepared in a pre­ scribed format, to be prepared andmade available to investors upon request. The statutoryfilingandtheannualreportmay be drawn up under either IFRS or Lux GAAP,withoptionalfairvalueprinciples. To avoid duplication of work, the same accountingprinciples areusuallyapplied to both the filing and reporting process. Likethelimitedpartnershipregisterofan SCSp, the SCA’s shareholders register is not publicly available. Conclusion WhiletheSCSpremainsthedefaultchoice for Luxembourg private funds, an SCA canbeaverycompellingalternativewhere a corporate, sharebasedvehiclebetterfits the investor base, distribution strategy or tax structuring objectives. When the SCA adopts the RAIF wrapper, the RAIF regime’staxneutralityandvariablecapital rules, further supported by confidential­ ityfocused drafting, means that the SCA meets all key requirements and prefer­ ences that fund sponsors expect from a private fundvehicle. Luxembourg Private Funds Organized as Companies: How to Make Them Fit for Purpose? Kirchberg© LuxembourgCity L e 26 juin, leministère des Fi­ nances de laRépublique po­ pulaire deChine a annoncé l’émissiond’unnouvel emprunt souverain libellé en euros de cinq milliards d’euros, destiné à être coté sur lemarché EuroMTF de la Bourse de Luxembourg (LuxSE). L’opération a été célébrée lors d’une céré­ monie « Ring the Bell » organisée à Luxembourg,enprésencederesponsables chinoisetluxembourgeoisainsiquedere­ présentants du secteur bancaire. Cette nouvelle émission intervient sept mois après une précédente opération de quatre milliards d’euros, également cotée àlaBoursedeLuxembourg.Elleconfirme lerecoursrégulierdelaChineàlaplacefi­ nancière luxembourgeoisepour ses émis­ sionsobligatairesinternationalesetlasoli­ ditédesrelationsfinancièresentrelesdeux pays, engagées depuis 1994 avec la pre­ mière cotation internationale d’un em­ prunt souverain chinois à Luxembourg. Depuis, les liens entre les deux marchés se sont renforcés, avec une présence croissante d’émetteurs chinois sur la place luxembourgeoise. À l’occasion de cette émission, les autorités chinoises ont réaffirmé leur volonté d’approfondir la coopération financière avec le Luxem­ bourg et l’Europe. LaBoursedeLuxembourgconfirmeainsi sonpositionnementcommeplacederéfé­ rence pour les émissions souveraines in­ ternationales. L’emprunt aétéarrangépar un consortiumbancaire composé notam­ ment deBankofChina, BankofCommu­ nications et CréditAgricoleCIB. Les participants ont souligné le rôle du Luxembourg comme passerelle entre les marchés financiers européens et asia­ tiques, offrant aux émetteurs souverains un accès élargi aux investisseurs interna­ tionaux. Cette transaction s’inscrit dans la stratégiedelaChinevisantàdiversifierses sources de financement. Elle traduit la volonté de maintenir un accèsdurableauxinvestisseurseuropéens tout en confortant la position de Luxem­ bourg comme hub international de réfé­ rence pour les marchés obligataires. Les intervenants ont enfin rappelé l’impor­ tance de cette coopération pour le déve­ loppement des marchés de capitaux, notamment dans la finance durable. La Chine renforce sa présence à la Bourse de Luxembourg ©LuxSE