Valsen Fiduciaries Funds

Luxembourg Collective Investment in Transferable Securities (UCITS)

The Commission de Surveillance du Secteur Financier (CSSF) is a public institution which supervises the professionals and products of the Luxembourg financial sector. It supervises, regulates, authorises, informs, and, where appropriate, carries out on-site inspections and issues sanctions.

About Luxembourg Collective Investment in Transferable Securities (UCITS)

An Undertaking for Collective Investment in Transferable Securities (UCITS) is an investment fund that meets the criteria laid down by EU Directives to be eligible for sale in EU Member States. The UCITS may be set up as a single fund or as an umbrella fund with multiple compartments. The constitutional documents must expressly provide for that possibility and the prospectus must describe the investment policy of each compartment.

Luxembourg has successfully positioned itself as the global leader for cross-border distribution of investment funds, with the result that today more than 65% of UCITS funds distributed internationally are based in Luxembourg.

Luxembourg Collective Investment in Transferable Securities (UCITS) Legal Requirements

Requirements Description
  1. Applicable legislation

Luxembourg Law of 13 February 2007

UCITS Part I Law 17.12.2010

  1. Supervising Authority

Commission de Surveillance du Secteur Financier (CSSF)

  1. Corporate vehicle permitted

Common Fund (FCP)

Investment Company-variable capital (SICAV)

Investment Company-fixed capital (SICAF)

Limited Partnership

  1. Share capital or equivalent
    • Minimum subscription

EUR 1,250,000

    • Minimum investors

None

  1. Directors / Partners / Trustees
    • Minimum number

2

    • Corporate Directors / Partners / Trustees allowed

Yes

    • Local Directors / Partners / Trustees required

No

  1. Fund functionaries required
    • Custodian
      • Custodian required
Yes
      • Local custodian required

No

      • Eligible custodian

Licensed Financial institution

Licensed Trustee services provider

Any other person as the authority may approve

    • Fund manager / Investment manager
      • Fund manager required
Yes
      • Local fund manager required

No

      • Fund manager requires to be licensed

Yes

      • Eligible fund manager

UCITS can be managed by a Luxembourg management company or by a management company based in another EU Member State.

    • Fund administrator
      • Fund administrator required
Yes
      • Local fund administrator required

Yes

      • Eligible fund administrator

A Luxembourg UCITS must appoint a Luxembourg depositary which is among other things responsible for the safekeeping of the fund’s assets.

    • External auditor
      • External auditor required
Yes
      • Local external auditor required

Yes

      • Eligible external auditor

Luxembourg statutory auditor with appropriate professional experience

  1. Asset Requirements
      • Restriction on type of asset class invested

None

      • Asset diversification requirements

None

      • Limitation on size of the fund or total assets under management

None

  1. Local physical office required

No

  1. Prospectus / Offering Memorandum required to be filed

Yes

  1. Eligible for listing

Yes

  1. Estimated license processing duration

3-6 months

Ongoing Obligations

Requirements Description
Monthly obligations
Office Required
Quarterly obligations
None
Annual obligations
Submit annual audited accounts to CSSF for the financial year end
Other obligations

Notify CSSF of any of the following changes:

Change in the registered office address

Change of its agent in Luxembourg

Change in name or address of-

  • each director of the fund, if the fund is a company
  • each trustee of the fund, if the fund is a trust
  • each general partner of the fund, if the fund is a limited partnership.

Appointment, resignation or removal of a Director or officer

Tax Obligations and Other Exemptions
Requirements Description
Business Tax
Investment funds created under the AIF Law pay an annual subscription tax of 0.01% of their net asset value on the last day of every calendar quarter.
Withholding Tax
No withholding tax upon distribution to investors unless EU Savings Directive applies.
Net Worth Tax
Not subject to net worth tax
Subscription Tax
Certain money market and pension funds or AIFs investing in other funds which are already subject to subscription tax are exempt from subscription tax.
Capital Duty
No capital duty applies on incorporation of the corporate form (except a registration duty of €75)
Value Added Tax (VAT)
No VAT on Management services – except mere technical services – provided to a AIF are exempt from Luxembourg VAT
Stamp duty Act
Mutual funds are exempt from payment of stamp duty

Benefits of a Luxembourg Collective Investment in Transferable Securities (UCITS):

  • Internationally recognised investment fund industry;
  • Reputable regulatory environment owing to its accessibility, knowledge and responsiveness of the regulator;
  • Political, economic and social environment’s stability as well as stable legal environment;
  • Favourable tax environment;
  • Attractive jurisdiction for institutional investors; and
  • Luxembourg investment funds benefit from a product passport, enabling them to be marketed to investors in the European Union (EU) and European Economic Area (EEA).