A new bill of law as regards reserved alternative investment funds (fonds d’investissement alternatifs réservés) (“RAIF“) has been approved by the Luxembourg Council of Government. It has now to be submitted to the Luxembourg Parliament. This new type of alternative investment fund (“AIF”) will combine the legal and tax advantages of the fund regimes of the specialised investment funds (fonds d’investissement spécialisé) (“SIF”) and the risk-capital investment companies (société d’investissement de capital à risque) (“SICAR”), without, however, being subject to direct regulatory supervision by the Luxembourg regulator (“CSSF”). The key features of the RAIFs will be as follows:


  • RAIFs will not be subject to direct CSSF supervision

The RAIF will not be subject to the prior authorisation of the CSSF or to its on-going regulatory supervision. “Indirect” supervision will take place through the supervision of the AIFM appointed.


  • Eligible investors

RAIFs will be available to well-informed investors. This will include institutional investors, professional investors and investors investing certain minimum amounts (EUR 125,000).


  • Authorised AIFM must be appointed

A RAIF will have to appoint an authorised AIFM established in Luxembourg, in another Member State of the European Union or in a third country (as soon as the AIFMD management passport becomes available to third country managers).


  • Umbrella structure – Compartments

It will be possible to organize the RAIF as an umbrella structure with multiple sub-funds.


  • Variable capital possible

A RAIF may opt to have either a fixed or a variable capital structure.


  • Risk-spreading rules

The risk-diversification requirements are proposed to be identical to those applicable to SIFs. Should the RAIF invest in risk capital investments only, then the risk-spreading requirements would not apply.


  • Flexible corporate form and structure

All well-known Luxembourg legal forms should be available for RAIFs:

– public limited company (société anonyme – SA)

– special limited partnership (société en commandite spéciale – SCSp)

– partnership limited by shares (société en commandite par actions, SCA)

– common fund (fonds commun de placement – FCP) (without legal personality)

– common limited partnership (société en commandite simple – SCS)

– private limited liability company (société à responsabilité limitée – S.à r.l.)

– cooperative organised as a public limited company (société coopérative organisée comme une SA)


  • Tax Regime

RAIFs should be subject to an annual subscription tax (taxe d’abonnement) at a rate of 0.01%, with several exemptions. Should the RAIF invest into risk capital investments, it should be subject to the tax regime applicable to SICARs (it would be fully subject to tax except for risk capital income and gains). The VAT exemption on AIF management services will also apply. The law on RAIFs is expected to enter fully into force during the second quarter of 2016.


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