Investment funds
Launching an investment fund in Luxembourg: RAIF, SIF, SICAR
Quick answer
To launch an investment fund in Luxembourg, you choose a regime (RAIF, SIF, SICAR or Part II UCI) and a legal form (often an SCSp or an SCA). Most vehicles for well-informed investors are alternative funds managed by an AIFM (which must be authorised for a RAIF), with a depositary and a central administration in Luxembourg. The CSSF supervises, except for the RAIF, which is not directly authorised.
Launching an investment fund in Luxembourg involves three linked decisions: the regime (RAIF, SIF, SICAR or Part II UCI), the legal form (most often an SCSp for private equity or debt strategies), and the manager (internal or external AIFM). Most of these vehicles are aimed at well-informed investors, rely on a local depositary and central administration, and fall under the CSSF, with the notable exception of the RAIF, which is not directly authorised. A private equity lawyer frames these choices from the outset.
In short
- Choose the regime: RAIF, SIF, SICAR or Part II UCI depending on the strategy and the investors.
- Select the legal form: SCSp, SCA, SA or common fund.
- Appoint an AIFM (internal or external): it must be authorised for a RAIF; for a SIF or a SICAR, a registered AIFM is sufficient as long as the assets under management remain below the thresholds of the law of 12 July 2013.
- Appoint a depositary and a central administration established in Luxembourg.
- Restrict access to well-informed investors for the SIF, SICAR and RAIF regimes.
- Prepare the documentation: prospectus or offering document, LPA and service agreements.
| Criterion | RAIF | SIF | SICAR | Part II UCI |
|---|---|---|---|---|
| Target investors | Well-informed investors | Well-informed investors | Well-informed investors | Retail investors possible |
| Strategy | Multi-strategy | Multi-strategy | Risk capital (PE / VC) | Broader, public distribution |
| CSSF authorisation of the vehicle | No (supervision via the AIFM) | Yes | Yes | Yes |
| AIFM mandatory | Yes | Depending on size and strategy | Depending on size and strategy | Yes in practice |
| Depositary in Luxembourg | Yes | Yes | Yes | Yes |
| Speed of launch | Generally faster | Subject to authorisation | Subject to authorisation | Subject to authorisation |
Overview of the Luxembourg fund regimes
Quick answer. Luxembourg offers several fund regimes. Vehicles for well-informed investors mainly rely on the RAIF (reserved alternative investment fund), the SIF (specialised investment fund) and the SICAR (investment company in risk capital). Alongside them, funds open to the general public fall under the UCITS regime or the Part II regime of the law on undertakings for collective investment.
Each regime follows a different logic. The SIF is a highly flexible multi-strategy framework, supervised by the CSSF (Luxembourg financial sector supervisory commission). The SICAR specifically targets risk capital, that is, private equity and venture capital. The RAIF takes over the flexibility of the SIF and the SICAR but without direct authorisation of the vehicle, which speeds up the launch. The Part II regime, for its part, allows distribution to a broader investor base.
The choice of regime is not a mere formality: it determines the target investors, the level of supervision, the applicable tax treatment and the management constraints. A lawyer specialising in investment funds analyses the strategy, the origin of the investors and the time horizon of the project before selecting one of these frameworks.
Who each vehicle is for: well-informed investors or the public
The first dividing line concerns the target investors. The SIF, the SICAR and the RAIF are reserved for well-informed investors: institutional investors and investors who qualify as professionals, as well as any other investor who declares in writing that they adhere to this status and who either invests a minimum of EUR 100,000 in the vehicle or has a written assessment from a credit institution, an investment firm, a management company or an authorised AIFM certifying their expertise, experience and knowledge to properly assess the investment. This threshold was lowered from EUR 125,000 to EUR 100,000 by the law of 21 July 2023.
This notion of well-informed investor shapes the whole project. It determines the documentation, the subscription arrangements and the eligibility checks carried out before each investor is admitted. It also explains the flexibility of these regimes: because the investors are presumed to be well-informed, the legislator relaxes certain protections imposed on funds for the general public.
Conversely, the UCITS and Part II regimes are aimed, depending on the case, at retail investors. They impose stricter rules on diversification, information and protection. An initiator seeking broad distribution to the public turns to these frameworks, accepting heavier constraints than for a vehicle reserved for well-informed investors.
Choosing the legal form: SCSp, SCA or SA
The legal form is layered on top of the regime. Private equity, private debt and infrastructure strategies often favour the special limited partnership (SCSp), which has no legal personality, is modelled on the common-law limited partnership and is valued for its contractual flexibility and tax transparency.
Other projects opt for a partnership limited by shares (SCA) or a public limited company (SA) in the form of an investment company with variable capital (SICAV) or an investment company with fixed capital (SICAF), where legal personality, variable capital or share-based governance is sought. The common fund (FCP), a co-ownership without legal personality managed by a management company, also remains possible for certain structures.
The form is combined with the regime: for example, one speaks of a RAIF set up as an SCSp, or a SIF organised as a SICAV SCA. The SCSp has become the standard for private equity, but the choice depends on the governance sought, the tax treatment and the investors' expectations. This combination is decided upfront with a lawyer.
The role of the AIFM and the AIFM Directive
Most vehicles reserved for well-informed investors are alternative investment funds (AIFs) within the meaning of the AIFM Directive. As such, they must be managed by an alternative investment fund manager (AIFM), responsible for portfolio management and risk management, which must be authorised as soon as the assets under management exceed EUR 100 million (with leverage) or EUR 500 million (without leverage and without redemption rights for five years), and in all cases for a RAIF.
The initiator can choose between an external AIFM, that is, a third-party management company that is already authorised and takes on the vehicle, and an internal AIFM where the fund reaches a size that justifies its own management structure. The external AIFM route is common for a fast launch, as it avoids setting up a full authorisation for each project.
The AIFM Directive imposes a core set of obligations: risk and liquidity management, valuation, regulatory reporting, remuneration and conflict-of-interest rules. Using an AIFM is therefore a structuring decision. A private equity lawyer in Luxembourg coordinates the relationship with the AIFM and the allocation of responsibilities from the design of the fund.
Depositary and central administration
Every regulated fund (UCITS, Part II UCI, SIF, SICAR) and every RAIF must appoint a depositary established in Luxembourg. The depositary is responsible for the safekeeping of the assets, cash flow monitoring and a compliance check of the fund's transactions. For alternative funds, its duties derive from the AIFM Directive and the law transposing it.
The fund must also have a central administration in Luxembourg. The central administrator keeps the accounts, calculates the net asset value, maintains the register of investors and processes subscriptions and redemptions. These services are often entrusted to a specialised professional, separate from the depositary.
These two parties are not mere service providers: they contribute to the security of the vehicle and to regulatory compliance. Selecting them, negotiating their contracts and defining their responsibilities are an integral part of the launch. The quality of these contractual relationships determines the smooth day-to-day running of the fund.
CSSF supervision and the special case of the RAIF
The Luxembourg financial sector supervisory commission (CSSF) is the supervisory authority for Luxembourg funds. For a SIF, a SICAR, a UCITS or a Part II UCI, the vehicle itself must obtain CSSF authorisation before its launch, and then remains subject to its ongoing supervision.
The RAIF is the major exception. It is not directly authorised by the CSSF and does not appear on an official list of supervised funds. Supervision is exercised indirectly, through the authorised AIFM that manages it and that is itself subject to CSSF supervision. It is this mechanism that allows the RAIF to be launched more quickly.
This absence of direct authorisation does not mean an absence of regulation. The RAIF must be managed by an authorised AIFM, comply with the law that establishes it, appoint a depositary and a central administrator, and be filed and published. Supervision simply shifts from the vehicle to its manager.
Steps and timescales for setting up
The launch follows a logical sequence. First, the investment strategy, the target investors and the amount of capital to be raised are defined, then the combination of regime and legal form is settled. Next, the AIFM, the depositary and the central administrator are appointed, and the legal documentation is drafted.
Then comes the incorporation stage: for funds subject to authorisation, the file is submitted to the CSSF, which examines the documentation, the service providers and the governance before authorising the launch. For a RAIF, there is no authorisation of the vehicle, but incorporation recorded by notarial deed within five business days, whatever its legal form, registration with the Trade and Companies Register and publication. Timescales therefore depend heavily on the regime chosen.
Durations vary with the complexity of the strategy, the availability of the service providers and the regime chosen. A RAIF managed by an existing AIFM is generally set up faster than a fund subject to full CSSF authorisation. No timetable is guaranteed: the quality of the file and the responsiveness of the parties involved weigh heavily on the actual timescale.
Documentation and the role of the lawyer
The fund rests on precise documentation. Depending on the regime and the form, a prospectus or an offering document is prepared, together with the articles of association or the management regulations and, for limited partnership structures, a limited partnership agreement (LPA) that organises relations between the managing general partner and the limited partner investors.
This framework documentation is supplemented by the service agreements: management agreement with the AIFM, depositary agreement, central administration agreement, and often ancillary agreements (side letters, subscription forms, valuation policy). Each document must be consistent with the others and with the strategy presented to investors.
The role of the lawyer is central at every stage. The firm structures the vehicle, drafts and negotiates the documentation, coordinates the service providers, prepares the regulatory file and ensures the structure is compliant. The law firm remains responsible for the legal analysis; digital tools merely assist its work. To scope a project, you can request a quote.
| Strategy | Common regime | Common form |
|---|---|---|
| Private equity / venture capital | RAIF or SICAR | SCSp or SCA |
| Private debt | RAIF or SIF | SCSp |
| Real estate | RAIF or SIF | SCSp or SICAV SCA |
| Diversified strategies for well-informed investors | SIF | SICAV SA or SCA |
| Distribution to a broader public | Part II UCI | SICAV SA or FCP |
Depending on your profile
For emerging managers
A RAIF managed by an external AIFM makes it possible to launch a first vehicle without applying for authorisation of a management company of your own. The SCSp offers the contractual flexibility of the limited partnership. The manager focuses on the strategy while the AIFM handles regulated management and risk control.
For fund initiators
The choice of regime (RAIF, SIF, SICAR or Part II) depends on the target investors and the timetable. The RAIF speeds up the launch because the vehicle is not directly authorised; a SIF or a SICAR goes through the CSSF. The legal form and the documentation are then aligned with the strategy and with investors' expectations.
For investors acting in a professional capacity
The SIF, SICAR and RAIF regimes are reserved for well-informed investors. As the RAIF is not directly authorised by the CSSF, supervision runs through the AIFM. Reading the prospectus or offering document and checking the AIFM, the depositary and the central administrator remain essential before any subscription.
For international groups
Luxembourg serves as a recognised platform for structuring a pan-European fund, with a harmonised AIFM framework and an established ecosystem of service providers. The SCSp and the SICAV SCA suit most strategies. Upfront legal coordination secures the fit between regime, form, tax treatment and distribution.
Official sources
Update history
- : 'UCITS Part II' regime corrected to 'Part II UCI' (Part II of the law of 17 December 2010), depositary obligation limited to regulated funds and the RAIF, and notarial deed for the RAIF clarified.