Specialised investment fund

The SIF is the vehicle of choice for private equity, real estate and hedge funds. The SIF does not require a promoter and is not only open to institutional and professional investors, but to well-informed private investors as well. Thanks to its flexible legal regime, SIFs can be also launched by high-net-worth families, family offices and small and medium-sized companies.

SIFs can be structured with a fixed or a variable share capital. When required, the SIF can be set up as an umbrella fund with multiple sub-funds, each independent and bankruptcy remote from the other sub-funds, and each following different investment policies.

There is no limitation as to the eligible assets in which a SIF can invest. SIFs must comply with the principle of risk spreading and may not invest more than 30% of their net assets or commitments in securities of the same type or issued by the same issuer. Derogations are allowed by the CSSF on a case-by-case basis for certain less risky securities.

The SIF’s tax features make it a very attractive vehicle: no withholding tax on dividend distributions, no corporate income tax on revenues or capital gains, and no wealth tax on its assets. In addition to that, SIFs also generally benefit from double tax treaties when structured as an investment company. Alternatively, SIFs can be set up under tax transparent contractual form, allowing investors in the SIF to claim double tax treaty benefits on the underlying assets of the fund. The SIF’s management fees are VAT exempted.

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