Articles
Special Limited Partnership in Luxembourg
Updated on Tuesday 25th April 2023 Rate this article
based on 4 reviews
based on 4 reviews
1.jpg)
The special limited partnership in Luxembourg (SLP) 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. This form of partnership, along with others like the common limited partnership are preferred by foreign investors in Luxembourg, especially those who activate in private equity.
| 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 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 SLP, 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 SLP 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 SLP 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 customarily 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.
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 SLP 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 SLP 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 Luxembourg, 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.
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.
SLP 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 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, 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 please contact our company formation agents in Luxembourg.
Meet us in Luxembourg
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 +352 671 533 922. Alternatively you can incorporate your company without traveling to Luxembourg.
Testimonials
As a BridgeWest partner for many years, CompanyFormationLuxembourg.com is for sure a great choice when wanting to start a business in this important financial hub. International entrepreneurs can rely on the professionalism of this team.
Vlad Cuc, Director of BridgeWest www.bridgewest.eu
Read more testimonialsVlad Cuc, Director of BridgeWest www.bridgewest.eu
For Website Owners
