The special limited partnership in Luxembourg (SLP), also known as SCSP in Luxembourg, is a flexible type of partnership different from others because it has no legal personality. Its advantages lie not only in its simplicity and flexibility but also in its transparency.

Our team of local agents can provide support if you want to open a company in Luxembourg, including a special limited partnership in this country.

Quick Facts
Best use for SLP in Luxembourg	- hedge funds, - private equity, - cryptocurrency, - collectibles
Legal personality (YES/NO)	No
Time frame for registering a SLP in Luxembourg	Around 4 weeks
Number of partners	At least 2
Number of investors	There is no limit
Regulatory approval (YES/NO)	No
Bank deposit for SLP (YES/NO)	Yes
Minimum share capital (YES/NO)	No
Formalities for company formation of a SLP	Partnership agreement or deed of incorporation with information about the company name and purpose
Certificates for SLP in Luxembourg	- Luxembourg Inland Revenue, - Joint Social Security Centre, - Registration Duties, - Estates and VAT Authority
Audit required (YES/NO)	No
Preparation of annual financial statements (YES/NO)	No
Advantages of SLP in Luxembourg	- flexibility, - no capital required, - great taxation, - fast company registration in Luxembourg
Tax advantages	- no VAT, - no corporate income tax, - no wealth tax
We can provide registration support for SLP	Yes

Our company registration agents in Luxembourg can help you set up a special limited partnership in Luxembourg or choose another of the available types of companies.

The particularities of a SLP in Luxembourg

The special limited partnership, or SCSP in Luxembourg has no legal personality, meaning that its founders are fully liable for the debts and obligations. At the same time, this allows for a great degree of flexibility, especially when deciding upon the agreement of the partnership. There are two types of partners needed to form the SLP in Luxembourg: at least one general partner who has unlimited liability for the structure and at least another partner (or more) who is liable only to the extent of the contributions made within the partnership. The partners are allowed to decide upon a great number of issues regarding the organization and functioning of the SCSP in Luxembourg, such as:

the majority rules;
the rules for admitting new partners;
the issuance of new partnership interests
dividend payment;
the liquidation procedure, etc.

The contributions to the Luxembourg SCSP can be in cash or in kind. Voting rights within the special limited partnership are more flexible: the traditional one share-one vote rule does not apply and the partners can design their own voting and economic rights. If you would like to understand better the Luxembourg SCSP structure you can watch the following infographic:

Registration and taxation of SLP

The special limited partnership must be registered at the Luxembourg Trade Register. If the SLP is used as a regulated vehicle it is not subject to corporate income tax, municipal business tax and wealth tax. Our experts can give you more information about the taxation regime for partnerships in Luxembourg.

The SLP in Luxembourg is an attractive investment structure, as the investors will not be required to pay a set of customary taxes. For example, the SLP is exempted from the payment of the value added tax and it is considered a tax transparent entity.

It can benefit from a tax exemption on the payment of the income tax (which is applicable to the fund’s partners, not to the fund itself), in the situation in which the investor who has the quality of a general partner holds less than 5% the fund’s interests.

The SLP is not required to pay the withholding tax on the distribution of dividends, but it is necessary to know that it can’t benefit from the provisions of the double tax treaties signed by Luxembourg. The SLP can also be exempted from the payment of the municipal business tax and its investors are not required to pay the wealth tax.

When you open a SCSP in Luxembourg, you must also consider the charging of this structure. Among the taxes that come to the attention of an SCS in Luxembourg, we specify:

• business tax,
• property tax,
• VAT for an annual turnover of less than EUR 112,000.
• Net wealth tax under certain conditions.
• Personal income tax.
• Fixed registration fee.

With the establishment of the company, you must consider the support of an accounting firm in Luxembourg in order to align yourself with the requirements and formalities imposed for this type of business. We recommend contacting one of our specialists.

What are the main traits of a Luxembourg SLP?

The SLP can be a great vehicle for those who want to open an investment fund in Luxembourg, as it benefits from a set of characteristics especially designed to cover the needs of a wide category of investors. One of the main characteristics of the Luxembourg special limited partnership is that it must be set up by a general partner and a limited partner. The structure is also defined by the following:

• the investment activities can start relatively fast, as the SCS in Luxembourg can be registered in a matter of weeks;
• it does not need to obtain a prior approval from the local institutions, as a general rule (however, exemptions can apply);
• the SCS in Luxembourg can function as an unregulated alternative investment fund, operating under the Alternative Investment Fund Manager Directive;
• the investors will have to appoint a fund manager who has received an authorization only in the case in which the fund’s assets under management are above a certain threshold;
• it can be used for a wide category of investments, as it can hold assets in the form of bonds, loans, equity, real estate and others.

The use of special limited partnership in Luxembourg

A special limited partnership in Luxembourg is normally created for establishing different kinds of funds, such as:

• Venture capital fund.
• Pledge fund.
• Private equity fund.
• Microfinance fund.
• Private debt fund.
• Assets fund.

One should note that there are no restrictions regarding the type of investors establishing a special limited partnership in Luxembourg. Our dedicated agents with experience in business formation and investment funds can provide the necessary assistance and support for registering a special limited partnership in Luxembourg.

Whatever the choice in terms of developing activities in this country, including opening a Luxembourg SCSP, we advise you to turn to our accounting firm in Luxembourg. Our team of specialists has the necessary experience to handle important tasks, such as bookkeeping, maintaining the company's accounts, audits, and preparation of annual financial statements. You will also be able to get an idea about the current legislation, as well as be aware of the changes brought up to date.

Management of SLP in Luxembourg

According to the Luxembourg Law, and particularly the Commercial Companies Law 1915, one or more managers can be in charge of a special limited partnership, even if they are unlimited partners. Any problem related to the management of SLP in Luxembourg enters the attention of executives.

In the case the management of a SLP in Luxembourg is handled by a third party, such party will only be responsible for the performance of this type of company. We have a team of specialists who can tell you more about the management of a special limited partnership in Luxembourg.

Preconditions for SCSP in Luxembourg

Another important aspect that you must take into account when you want to open a Luxembourg SCSP is that you must have the necessary authorizations to be able to undertake the desired operations in this country. For example, you must make sure that the general partners of the special limited partnership in Luxembourg have authorization for trading, which is not valid for limited partners of this structure.

What other aspects do you have to take into account when opening a SCSP in Luxembourg?

Although the structure itself may seem complicated in terms of documents and formalities for SCS in Luxembourg, in reality, it is a low degree of difficulty. However, it is important to talk to a specialist in the field to explain exactly what needs to be prepared. Here are other important aspects of SCSP in Luxembourg:

• This structure can be established for a limited or unlimited period of time.
• The business address must be the same as the registered office in Luxembourg.
• You have the possibility to change the business structure at a given moment and create a new legal personality in Luxembourg.
• There is no minimum capital required for Luxembourg SCSP, but the capital is created from the ownership stocks, mentioned in the agreement.
• The same agreement that is drawn up when a special limited partnership is registered in Luxembourg must also include information about the conditions under which shares can be transferred. Among them, prior notification is required.
• The annual financial statements of this structure must be approved in the general meeting.

Legal regime of an SCSP in Luxembourg

This type of structure allows the involved partners to modify their sharing in profits and losses, as well as divisions, according to the signed agreement in this sense. If these aspects are not specified, it will be taken into account that each limited partner can participate equally to the contribution of its partnership gains.

On the other hand, the right to vote can be mentioned in the agreement of SCSP in Luxembourg. Thus, the voting rights of each partner are proportional to their partnership interests, just like in the case presented above. And decision-making rules can be included in the signed partnership. Thus, certain decisions must not directly involve the partners, but such details must be specified in advance.

Practical use of SCS in Luxembourg

There are many reasons for choosing SCS in Luxembourg as a business structure. Thus, this can be the right option for private equity, venture capital, joint ventures, and even real estate investments. Corporate flexibility is one of the main characteristics of such a business structure, which makes it extremely popular among high-quality foreign investors.

Advantages of SLP in Luxembourg

This kind of company presents a series of benefits that are attentively measured by investors who want to generate and enjoy profits in Luxembourg. Below you can see a few advantages of a special limited partnership in Luxembourg:

• Compared to other investment vehicles available on the market, the special limited partnership is less expensive. There is no need for a deposit.
• A SLP in Luxembourg has no legal personality, and therefore, it offers a certain level of flexibility.
• Confidentiality is another great advantage linked to special limited partnerships in Luxembourg. There is no information disclosed about the limited partners.
• There are no complex formalities for opening a SLP in Luxembourg, so one can start the activities relatively fast.

International investors who want to set up a special limited partnership in Luxembourg can be guided by one of our agents. We have the necessary expertise to help foreigners start a business in Luxembourg by managing the procedures implicated.

SCSP and accounting in Luxembourg

SLP is also advantageous from an accounting point of view. More precisely, the partners are not obliged to prepare annual accounts, but it is necessary to respect the general accounting rules. Our team of agents can contact you with an experienced team of accountants, who can provide you with more information about accounting for SLP in Luxembourg.

What other information do you need to know about SLP in Luxembourg?

If you are interested in setting up a special limited partnership in Luxembourg, it is important to know that the assets you own will not be passed on to the managers or partners, but to the entity.

Moreover, the domicile of a special limited partnership in Luxembourg (also known as SCS in Luxembourg) must be located at the seat of its central administration which must coincide with the place of the registered office. This must be stipulated in the special limited partnership documents, according to the laws of Luxembourg.

It is important to know from the beginning what are the rules for setting up a SLP in Luxembourg, in order to discover both the flexibility offered and the advantages of this structure. All this information can be provided in detail by our specialists.

Are you thinking of making employees in the company? You will need payroll services in Luxembourg. These involve the preparation of salary statements, the calculation and payment of taxes, and then the distribution of salaries in the company, in accordance with internal regulations. If you want to benefit from such services, we invite you to contact our specialists, by phone or online, and find out the costs involved.

Why open a SLP in Luxembourg?

SLP is a great investment tool for those interested in private equity funds, real estate funds, infrastructure funds, tangible assets, and even microfinance funds. Drafting and depositing the documents of a special limited partnership are important tasks that can be properly handled by one of our company formation representatives in Luxembourg.

You can ask for a free case evaluation or send your requests and let us provide you with the best options for your future activities in Luxembourg.

Making investments in Luxembourg

Luxembourg is one of the most powerful business centers in the world, a founding member of the World Trade Organization (WTO) and the Organization for Economic Co-operation and Development (OECD), which gives the country a solid status among the countries of the European Union.

With a stable economy, permissive legislation, excellent infrastructure, and a favorable charging system, Luxembourg is among the preferred countries for opening or developing a business. The formalities for setting up a company are quite simple, and foreign investors can open their operations in sectors such as finance, information, and communication technologies, research and development, automotive, shipping, and logistics. Here are some data and statistics that outline the economic direction of Luxembourg:

Nealy USD 129 billion represented the total FDI stock for Luxembourg in 2019.
In matters of simplified business formalities, Luxembourg ranked 72nd out of 190 worldwide economies, according to the 2020 Doing Business report.
A series of fiscal benefits are offered for businesses activating in sectors like biotechnology, financial services technology, ICT, and more.
The 2020 Global Competitiveness Index ranked Luxembourg 18th by the World Economic Forum.

Working with our agents in Luxembourg

Those interested in starting a business in Luxembourg can be guided by one of our agents with experience in the field. There is no need to worry about the formalities involved in the process of company formation, as our specialists can manage all the tasks in a professional manner. Working with our company formation experts in Luxembourg means relying on confidence, professionalism, and efficiency right from the start.

Frequently Asked Questions

Our company formation agents in Luxembourg often receive questions about the available types of partnerships in Luxembourg, and particularly about special limited partnerships. We present you with a few of these questions, hoping that the answers will help you before we start our collaboration.

1. What is a SLP in Luxembourg?

SLP is the abbreviation for a special limited partnership, or SCSP in Luxembourg, a flexible form of business that is preferred by numerous foreign entrepreneurs. The registration is quite simple if you discuss it with our local agents.

2. Why does SLP not have a legal personality?

SLP can be formed by partner entrepreneurs who are fully responsible for the obligations and duties of this form of business. In addition, each partner is responsible for his or her share of the investment or financial contribution to the business.

3. What rights do partners have in an SLP in Luxembourg?

Business people who partner for a SLP in Luxembourg can decide on new partners, support business rules and establish voting rights together. More information in this direction can be found by contacting our specialists.

4. How is an SLP registered in Luxembourg?

Special limited partnership registers, like any other type of company, respecting the rules and formalities imposed by the Trade Register in Luxembourg. Because we collaborate with the institutions in this country in terms of setting up companies and documents, we can help you with the registration of a SLP in Luxembourg.

5. What can SLP be used in Luxembourg?

Special limited partnerships are suitable structures for those interested in microfinance funds, venture capital funds, private equity funds, for example. If you are interested in this flexible structure, do not hesitate to talk to us and find out all the details.

6. Are SLPs the subject of corporate tax in Luxembourg?

No, those who have SLP in Luxembourg do not have to pay corporate tax. This is a great advantage for foreign investors who want to grow their business in this country.

7. How many people can manage a SLP in Luxembourg?

SLP in Luxembourg can be managed by one or more people, depending on the intentions of the business partners. They must agree on SLP managers, but also on the number of people. Moreover, one or even all partners can be appointed managers of a special limited partnership in Luxembourg.

8. Do I need a sum of money to register an SLP in Luxembourg?

No, according to Luxembourg Law, you do not need a financial deposit to be able to open a SLP. And this is a benefit appreciated by foreign investors in this country.

9. What other advantages does an SLP have in Luxembourg?

SLP in Luxembourg can be set up without too many formalities. In addition, confidentiality is a strong point for this type of business structure. Partner information is not provided to the public.

10. Why choose to set up an SLP in Luxembourg?

SLP is a flexible structure that serves many types of investment funds and activities. Luxembourg is a top financial destination that offers many possibilities and simple formalities for setting up a company.

For more details about investment vehicles and other types of companies, such as SCSP in Luxembourg, please contact our company formation agents in Luxembourg.

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Special Limited Partnership in Luxembourg