Luxembourg has been very successful in attracting international investment funds and becoming a major financial center due to a series of factors. These include: a wide range of investment fund solutions, a friendly regulatory environment, a stable economy and an attractive taxation system. A guide on opening an investment fund can be provided to investors by our experts in company formation in Luxembourg.
Investors who want to set up an investment fund turn to the Luxembourg since it is the second fund market in the world, after the United States of America. Different types of investment funds are available to those interested in managing their wealth. The procedure of establishing an investment fund in Luxembourg contains the following steps:
• Choose the type of investment fund you want to set up in Luxembourg. The most common forms of investment funds are SICAV and SICAF and they are usually chosen by investors who can control the amount of capital invested;
• Decide on which type of legal entity you want the investment fund to be set up. Common investment funds have to be managed by a Luxembourg company;
• Assess the risk management of an investment fund – the process of risk management is undertaken by the company`s board of directors or handed to a team of financial consultants;
• Decide on the registered office and the main seat of the company which will manage the investment fund;
• Obtain approval for setting up the investment fund from the Luxembourg`s Financial Market Authority. This approval is accompanied by several formation expenses including notary fees, legal fees and advisory fees relating to initial structuring;
• Deposit the minimum share capital required for setting up an investment fund in Luxembourg. This varies according to the type of investment fund you decide to establish.
Our specialists in company incorporation in Luxembourg can give you all relevant information about the process of setting up an investment fund.
As a general rule, investment funds in Luxembourg are not subject to corporate taxation or income tax. Specialized investment funds (SIFs) are liable to an annual subscription tax, at a rate of 0.01% on their net worth. Investment funds in Luxembourg are also exempt from net wealth tax and from the withholding tax on distribution of dividends to non-resident investors. Furthermore, the VAT is not paid by the Luxembourg company which manages the investment fund.
We kindly invite you to contact our agents in company registration in Luxembourg if you need detailed information about the process of establishing an investment fund and the taxation system which applies to it.