Open SPV/SPE in Luxembourg

Luxembourg is one of the first countries in Europe to adopt a legislation on securitization and the entities that can be established. The Luxembourg Securitization Act was enabled in the spring of 2004 and allows for the securitization of a great number of assets, types of incomes and risks which would be accessible to both individual and institutional investors. The following types of assets can be securitized by special purpose vehicles or entities (SPVs/SPEs) in Luxembourg:

• -          securities, such as shares, bonds or loans;
• -          real estate property which can be movable or immovable;
• -          commercial debts;
• -          mortgages.

Our company registration agents in Luxembourg can offer more information on the law providing for SPVs and SPEs in the Grand Duchy.

Legal structures used for SPVs in Luxembourg

The Commercial Law provides for several types of companies one can set up in Luxembourg. Some of these structures can also be used to open special purpose vehicles in Luxembourg. Among them are:

• -          public limited companies;
• -          private limited liability companies;
• -          partnerships limited by shares.

Foreign investors may also use securitization funds to set up a SPV or a SPE in Luxembourg, however this type of entity will have no legal personality. No matter the structure used, the Luxembourg SPV may be compartmented.

How to register the Luxembourg special purpose vehicle

The establishment of the SPV will begin with the company registration process in Luxembourg. For this, the company must be entered into the Commercial Register after which it will apply for approval with the Luxembourg Financial Supervisory Authority, the CSSF. Luxembourg SPVs registered as public companies, will be subject to continuous supervision under the rules of the CSSF because this type of company may trade its assets on the Luxembourg capital markets.

A Luxembourg SPV or SPE may engage in two types of transactions:

• -          the acquisition or purchase of assets;
• -          the issuance of securities.

Also, Luxembourg does not impose any restrictions on the assets of a SPV.

For assistance in opening a SPV in Luxembourg, please feel free to contact us. Our Luxembourg company formation consultants can also offer information about the taxation of SPVs and SPEs.