Luxembourg investment funds can be organized in a number of legal forms. One of the most common is investment companies in the form of a Société d’Investissement À Capital Fixe (SICAF).
A SICAF is a type of closed investment scheme that acts as a limited shares company, with legal personality. It has fixed capital and it can operate either as an open or closed fund.
Characteristics of a SICAF
A SICAF has the following characteristics:
- it may be organized in almost any legal form, including a public limited company, limited partnership or private limited company;
- its authorized capital may only be increased by shareholders;
- changes brought to the capital require notification and publication;
- they may repurchase their own shares.
The minimum share capital for a SICAF must be of 300,000 EUR. Within six months from its authorization, the capital must reach 1,250,000 EUR.
The incorporation documents must be approved by Luxembourg’s Financial Market Authority. They include:
- articles of incorporation,
- the development plan,
- data regarding the sponsor,
- the management scheme,
- information regarding shares;
- other public information regarding the manager.
The approved registration articles must be authorized by a notary.
A SICAF is subject to Luxembourg commercial company law taxation, but it is exempt from Luxembourg income, capital gain and withholding tax. SICAF Investment Funds domiciled in Luxembourg are liable to a subscription tax at a rate of 0.05% on the Fund’s net assets.
The SICAF may be self-managed or it may be managed by a company.
The managers of the Funds require a license from the Luxembourg Financial Market Authority (CSSF). There are no restrictions regarding the nationality of the person who manages the Funds.
Because a SICAF is formed as UCITS funds (Undertaking for the Collective Investment of Transferable Securities), there are no restrictions as to who may be an investor.
A SICAF must have a depository bank with its registered office in Luxembourg. The depositary bank supervises the Funds and ensures that the shares are managed according to the statutory provisions.
The overall economic conditions make Luxembourg an attractive country for investors. The variety of fund types and the legal and regulatory framework have made Luxembourg the country of choice for investment managers.
If you need more information on how to create a SICAF, our company formation team in Luxembourg can provide more information and specific details.
Contact our specialists in company formation in Luxembourg, who have a large experience in finance and international business.
Set up an appointment with us at (+352)278 617 15. Alternatively you can incorporate your company without traveling to Luxembourg.