Open a FIAR in Luxembourg

In order to provide a more attractive environment to investors, the Luxembourg Government has recently passed a new law which enables the creation of a new type of fund: the Reserved Alternative Investment Fund. Shortly known as FIAR from the French Fond d’Investissement Alternatif Réservé, the new type of Luxembourg structure offers more flexibility as it does not fall under the supervision of the CSSF. The creation of the FIAR and special limited liability partnerships is part of the Government’s plan to increase Luxembourg’s competitiveness in terms of alternative investment funds in an ever changing financial market.

 

 

In order to open a FIAR in Luxembourg, a qualified investor must inject at least 125,000 euros into the fund. The fund is not required to obtain authorization from the CSSF, but it must be registered with the Chamber of Commerce in Luxembourg and its constitutive documents must specify that its object of activity is limited to investment in risk capital.

 

The Luxembourg FIAR will be supervised by an authorized alternative investment fund manager (AIFM) who can be a Luxembourg or an EU resident. Third-country nationals can also act as fund managers provided that they meet the AIFM passport requirements. The FIAR can use one of the following structures:

 

Our company formation agents in Luxembourg can assist you in setting up any of the type of companies mentioned above.

 

 

The law provides for two types of tax regimes for Luxembourg FIARs. This type of fund can choose to pay the 0.01% subscription tax calculated based on the value of its net assets, which exempts it from paying the corporate and the municipal taxes, or it can choose to be subject to normal taxation rules. Under the normal tax regime, the FIAR can take advantage of Luxembourg’s double taxation agreements which also provide for substantial tax exemptions or deductions.

 

With respect to annual accounts, the Luxembourg FIAR must appoint an independent auditor and issue a yearly report.

 

Have you registered a company in Luxembourg? It is the right time to collaborate with our accounting firm and benefit from payroll services in Luxembourg. This type of service involves the delivery of salaries to the company, after the calculation and payment of the related taxes. Our specialists use a series of procedures involved in payroll, but for information in this regard, we recommend that you contact us. You will be able to benefit from a free case evaluation right from the start.

 

Luxembourg FIARs can be set up as:

 

FIARs may also choose to have variable capital structures or be registered as umbrella corporations. No matter the type of structure utilized, the Luxembourg FIAR must appoint a local or a EU authorized investment fund manager. The FIAR must also nominate an independent auditor. The minimum amount to be injected into the fund is 125,000 euros.

 

The Reserved Alternative Investment Fund must be registered with the Luxembourg Chamber of Commerce within 10 days from its establishment.

 

 

The Luxembourg Reserved Alternative Investment Fund is the newest type of investment fund one can set up in the Grand Duchy and was designed to provide more flexibility to investors. The new regime also provides for more flexibility in choosing the assets to be invested in the FIAR. The fund may also choose to have a fixed or a variable capital.

 

For assistance in opening a FIAR in Luxembourg, you can contact our local company registration consultants.