The Luxembourg fund toolbox, in full.

The SIF is Luxembourg's tried-and-tested, directly CSSF-supervised vehicle. It can pursue almost any investment strategy — private equity, real estate, hedge, infrastructure, or a UCITS-style multi-strategy platform via sub-funds — while remaining lightly regulated compared to a retail fund.

Eligible investors

Restricted to "well-informed investors": (i) institutional investors, (ii) professional investors, or (iii) any other investor who confirms in writing that they adhere to well-informed status and either invests a minimum of €100,000, or has their expertise certified by a credit institution, investment firm or management company. Directors and persons involved in managing the SIF are exempt from these conditions.

Diversification

A SIF must follow the principle of risk-spreading: in practice, no more than 30% of assets or commitments may be exposed to a single "risk" (issuer), though a grace period applies while the portfolio is being built, and derogations are sometimes available.

CSSF approval & ongoing supervision

Before launch, the CSSF must approve the prospectus and constitutive documents, the choice of directors/managers, the management company, the central administration, the depositary and the auditor. Any substantial change thereafter — to the prospectus, constitutive documents, directors, or key service providers — again requires prior CSSF approval.

The SICAR is purpose-built for private equity and venture capital investing in risk capital — defined by CSSF Circular 06/241 as the combination of high risk and an intention to develop the target entities. Unlike the SIF, it carries no risk-diversification requirement, making it suited to concentrated, high-conviction strategies.

Eligible investors & assets

Same well-informed investor test as the SIF. Eligible assets are restricted to risk capital only — direct or indirect contributions to entities in view of their launch, development, or listing.

Legal forms

A SICAR can only be set up as an investment company — never as an FCP. Available forms: SA, SCA, Sàrl, cooperative company in the form of an SA (SCoSA), SCS or SCSp.

Tax treatment

SICARs in partnership form (SCS/SCSp) are generally tax transparent. SICARs in corporate form are fully taxable companies, but income from transferable securities qualifying as risk-capital investments — and income from funds held for up to 12 months pending investment — is tax exempt. No net wealth tax beyond the minimum, and no withholding tax on distributions.

The RAIF adopts most of the features of the SIF or SICAR, but is not itself authorised or supervised by the CSSF — supervision instead happens indirectly, through the mandatory appointment of a fully authorised external AIFM. This makes the RAIF the fastest regulated-equivalent route to market, and today's most popular Luxembourg private equity vehicle alongside the SCSp.

Two regimes: RAIF-SIF vs. RAIF-SICAR

A RAIF defaults to a "SIF-like" regime (unrestricted assets, 30% risk-spreading requirement, no CIT/NWT, 0.01–0.05% subscription tax). It can instead opt into a "SICAR-like" regime if it restricts itself to risk capital investments — trading the SIF-like tax exemption for SICAR-style taxation (fully taxable with risk-capital income exempt, minimum NWT only, no subscription tax). This choice should be made deliberately, with tax advice.

Governance without CSSF pre-approval

The RAIF is not subject to CSSF approval or ongoing supervision as a product, but must submit certain AML-related reports to the AED. It must appoint a Luxembourg depositary and auditor, and — unlike the SIF/SICAR — is required (not merely permitted) to appoint an authorised AIFM, based in Luxembourg or another EU/EEA member state.

Luxembourg's most popular private equity vehicle today: 61% of surveyed managers use an unregulated SCSp. Both the SCS (common limited partnership) and SCSp (special limited partnership) have at least one general partner with unlimited liability and one or more limited partners whose liability is capped at their commitment. The SCSp is purely contractual and carries no legal personality — offering the greatest structuring flexibility of any Luxembourg vehicle.

No product law, no CSSF oversight — until it's an AIF

Neither the SCS nor SCSp is subject to a specific product law, CSSF approval, or ongoing supervision. If the partnership qualifies as an AIF and its manager's assets under management exceed the AIFMD de minimis thresholds (€100m leveraged / €500m unleveraged) — or it simply wants the AIFMD marketing passport — it must appoint an authorised AIFM, which then unlocks EU-wide marketing.

Convertibility

An unregulated SCS or SCSp can convert into a regulated SIF or SICAR at any time — a common way to launch quickly and add regulatory status later if investor demand requires it. Limited Partnerships can also be used directly as the legal form underlying a SIF, SICAR or RAIF.