Investment funds
RAIF law in Luxembourg: regime, AIFM, tax and set-up
Quick answer
The RAIF (reserved alternative investment fund), created by the law of 23 July 2016, is a Luxembourg alternative investment fund reserved for well-informed investors. The fund is not authorised by the CSSF, but it must appoint an authorised manager (AIFM). This arrangement allows a fast launch while keeping supervision via the manager.
The RAIF is a Luxembourg investment fund vehicle established by the 2016 law. Its logic is simple: the fund is exempt from CSSF authorisation, but it must be managed by an [authorised AIFM](/en/aifm-luxembourg), which bears the regulatory supervision. Reserved for well-informed investors, it can take several forms, including the [SCSp](/en/special-limited-partnership-scsp-luxembourg), and aims for a shorter time to market than the SIF. Cerno Law Firm structures the vehicle and its documentation.
In short
- The RAIF is an alternative investment fund governed by the law of 23 July 2016.
- The fund is not authorised by the CSSF; it is not subject to prior authorisation by the regulator.
- Appointing an authorised AIFM is mandatory: it is the AIFM that is supervised.
- It is reserved for well-informed investors (institutional, professional and other well-informed investors within the meaning of the law).
- It can take several legal forms: SCSp, SCA, SA, SARL or FCP.
- Its main advantage is speed of launch, without prior authorisation of the vehicle.
| Criterion | RAIF | SIF |
|---|---|---|
| Legal basis | Law of 23 July 2016 | 2007 law on specialised funds |
| CSSF authorisation of the fund | Not required | Required before launch |
| Authorised AIFM | Mandatory | Mandatory if thresholds are reached |
| Investors | Well-informed only | Well-informed only |
| Speed of launch | Faster (short time to market) | Depends on the regulator's timetable |
| Direct supervision | Of the manager | Of the fund and the manager |
What is the RAIF in Luxembourg?
Quick answer. The RAIF (reserved alternative investment fund) is a Luxembourg fund vehicle created by the law of 23 July 2016. Its special feature is that the fund itself is not authorised by the CSSF (Luxembourg financial sector supervisory commission), while remaining a fund regulated indirectly through its manager.
The RAIF was designed to meet a market demand: a flexible and recognised vehicle, comparable to the SIF or the SICAR, but without the burden of prior authorisation of the fund by the regulator. It thus combines the flexibility of a non-authorised product with the credibility of regulated management.
In practice, a RAIF is an alternative investment fund (AIF) within the meaning of the AIFM Directive. Prudential supervision does not apply directly to the fund, which remains subject to registration with the RCS and to anti-money laundering obligations, but to the manager (AIFM) that manages it. It is this arrangement that makes the regime original and attractive.
The logic of the RAIF: no authorisation of the fund, but an authorised AIFM
The key point to understand is this: the RAIF is not subject to authorisation or direct supervision by the CSSF. It does not need to obtain prior authorisation from the regulator to be launched, unlike the SIF or the SICAR.
In return for this absence of authorisation of the fund, the law imposes a strict condition: the RAIF must appoint an authorised manager (AIFM), established in Luxembourg or in another Member State of the European Union. It is this manager that is supervised by its competent authority and that bears the regulatory responsibility.
Supervision therefore does not disappear: it shifts from the fund to the manager. This mechanism of indirect supervision, through the authorised manager, is the cornerstone of the RAIF regime and explains both its speed and its seriousness.
A fund reserved for well-informed investors
The RAIF is, as its name suggests, reserved. It is aimed exclusively at well-informed investors and cannot be marketed to the general public. This restriction is the price of its regulatory flexibility.
The category of well-informed investors covers investors qualifying as professionals within the meaning of the regulations, institutional investors, as well as any other investor who declares in writing that they adhere to the status of well-informed investor and who either invests a minimum of EUR 100,000 in the RAIF 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 restriction has a practical consequence: the documentation and governance can be lighter than for a retail product, because the investors are presumed capable of assessing the risks. A lawyer specialising in funds checks investor eligibility before any subscription.
The possible legal forms of the RAIF
The RAIF is not a legal form in itself: it is a regime that can apply to several forms. The initiator chooses the wrapper best suited to its strategy, its shareholder base and its target tax treatment.
The RAIF can thus take the form of a company, in particular a special limited partnership (SCSp), a partnership limited by shares (SCA), a public limited company (SA) or a private limited liability company (SARL), most often in the format of an investment company with variable capital. It can also be set up as a common fund (FCP), without legal personality, managed by its management company.
The [SCSp](/en/special-limited-partnership-scsp-luxembourg) is particularly popular in private equity, private debt and venture capital, for its contractual flexibility and tax transparency. The choice of form shapes the governance, the rules applying to the partners and the documentation: it is decided upfront, with a legal adviser.
The tax regime of the RAIF
The RAIF in principle benefits from a favourable tax regime, modelled on that of other Luxembourg fund vehicles. The general rule is that the fund is not subject to corporate income tax (IRC) under the ordinary rules, but falls under a specific regime for funds.
Two main routes coexist. By default, the RAIF pays an annual subscription tax of 0.01% of its net assets, payable quarterly, rather than ordinary taxation of profits; certain assets are exempt, for example units in other Luxembourg funds already subject to this tax. Where it invests exclusively in risk capital, a RAIF set up as a company can opt for a regime aligned with that of the SICAR: no subscription tax, but corporate income tax, with an exemption for income and capital gains derived from securities representing risk capital.
The applicable tax treatment therefore depends on the investment strategy, the form chosen and the options exercised. No generalisation replaces a case-by-case analysis: the tax structuring of a RAIF, including with regard to the investors and the underlying assets, must be validated by an adviser before the launch.
Speed of launch: RAIF or SIF?
The advantage most often highlighted for the RAIF is its speed of launch (time to market). Because the fund does not have to obtain prior CSSF authorisation, the launch timescale is significantly shorter than for a SIF or a SICAR.
With a SIF, the fund must be authorised by the CSSF before it can start, which involves the review of a file and a timetable that depends on the regulator. With a RAIF, most of the critical path is concentrated on setting up the manager, the service providers and the documentation, without waiting for authorisation of the vehicle.
This speed does not mean a lack of rigour. The RAIF must be entered on a list kept by the competent registry manager and be the subject of a notarial deed. Structuring, selecting the service providers and the documentation remain demanding stages that Cerno Law Firm handles to secure the timetable.
Depositary, administration and service providers
Even without authorisation of the fund, the RAIF relies on an infrastructure of service providers comparable to that of other regulated funds. Appointing a depositary established in Luxembourg is mandatory: it is responsible for the safekeeping of the assets and certain oversight duties.
The RAIF must also have a central administration in Luxembourg, which keeps its accounts, calculates the net asset value and maintains the register of investors. Its annual accounts are audited by an approved statutory auditor, which provides an independent audit guarantee.
These pillars are supplemented by the authorised manager (AIFM) and, depending on the case, a delegated portfolio manager, an investment adviser or a transfer agent. The consistency of this ecosystem determines the smooth running of the fund and the soundness of its documentation.
Documentation, conversion and the role of the lawyer
The documentation of a RAIF mainly comprises the constitutional documents (articles of association or management regulations), an offering document or prospectus describing the strategy, the risks, the fees and the subscription conditions, as well as the agreements concluded with the manager, the depositary and the central administration.
The RAIF regime offers considerable flexibility in terms of conversion. An existing vehicle can, subject to conditions, be converted into a RAIF or, conversely, a RAIF can move to another regime, for example an authorised SIF, where the strategy or the investor base justifies it. These operations require precise legal guidance.
The role of the lawyer is central throughout this chain. Cerno Law Firm, registered with the Luxembourg Bar, acts on the choice of form, the drafting of the constitutional documents and the offering document, the negotiation of the service provider agreements, investor eligibility and, where relevant, conversion. To assess your project, you can request a quote.
| Item | Characteristic |
|---|---|
| Legal forms | SCSp, SCA, SA, SARL or FCP |
| Manager | Authorised AIFM mandatory (Luxembourg or EU) |
| Depositary | Mandatory, established in Luxembourg |
| Central administration | In Luxembourg, NAV calculation |
| Audit | Approved statutory auditor |
| Investors | Well-informed (institutional, professional, other well-informed investors) |
Depending on your profile
For fund managers
The RAIF makes it possible to launch an alternative fund without waiting for CSSF authorisation of the vehicle, provided an authorised AIFM is appointed. It is a time-to-market tool for private equity, private debt or venture capital strategies, often housed in an SCSp.
For institutional investors
Reserved for well-informed investors, the RAIF combines the flexibility of a non-authorised product with the security of management supervised via the manager. The depositary, the central administration and an independent auditor oversee the running of the fund in Luxembourg.
For foreign initiators
The RAIF offers fast access to the Luxembourg financial centre without prior authorisation of the fund. The choice of form (SCSp, SCA, SA, SARL or FCP) and the selection of service providers are decided upfront, with a legal adviser registered with the Luxembourg Bar.
For advisers and family offices
The RAIF completes the range of Luxembourg vehicles where flexible structuring and a fast launch are sought. Subject to conditions, it can be converted to or from another regime such as the SIF, depending on the strategy and the investor base.
Official sources
Update history
- : Investor category aligned with the concept of well-informed investor in the law of 23 July 2016, and frequency of the subscription tax and the RAIF's obligations outside direct CSSF supervision clarified.