Open Retail Funds in Luxembourg

Foreign investors can set up various types of investment funds in Luxembourg, as it is known that the Grand Duchy is the home of the investment funds industry. Another fact is that most of the laws related to the establishment of investment funds are first set up and implemented in Luxembourg, which is why the number of professional investors is very high here. One of the most employed types of funds is the retail fund. There are two types of retail funds which can be registered in Luxembourg:

• -          open-ended retail funds;
• -          closed-ended retail funds.

Our Luxembourg company formation agents can offer information on the laws governing retail funds in this country.

Open-ended retail funds in Luxembourg

Luxembourg open-ended retail funds can take the form of UCITS and UCIS funds. The first step to set up an open-ended retail fund is to select the suitable type of company, or better said investment vehicle, and then register it with the Trade Register. After that, the retail fund must submit the following documents with the Luxembourg Financial Authority (the CSSF) for approval:

• -          an application form;
• -          the investment company’s registration documents;
• -          the management rules, in the case of common investment funds;
• -          the prospectus;
• -          the agreement with the depositary;
• -          information about the board of directors of the company;
• -          the risk management procedures.

In 2016, the UCITS Directive was amended and our company registration agents in Luxembourg can offer more information related to the new provisions for retail funds.

Closed-ended retail funds in Luxembourg

In order to establish a closed-ended retail fund in Luxembourg, one can must choose between the following types of investment companies:

• -          companies with variable capital;
• -          companies with fixed capital;
• -          common investment funds (FCP).

With the mention that the FCP is not a corporate entity, the same vehicles can be used to set up open-ended retail funds in Luxembourg. Also, both types of retail funds can be marketed to professional and retail investors.

For full information about the taxation of retail funds, do not hesitate to contact us. You can also rely on our company incorporation consultants in Luxembourg for assistance in opening other types of investment funds.