Luxembourg has gained significant attractiveness in international markets for the structuring of unregulated and lightly regulated Private Equity
Luxembourg has gained significant attractiveness in international markets
Luxembourg has gained significant attractiveness in international markets for the structuring of unregulated and lightly regulated Private Equity solutions as a result of increased allocations to Private Equity by institutional investors. Significant availability of Private Equity expertise in the fields of tax, legal, structuring, and back office solutions also acts as a catalyst for the development of Private Equity funds in Luxembourg. However, Private Equity firms are currently facing an ever changing and sophisticated regulatory environment.
Luxembourg has many professional organizations and regulatory bodies which were set up to help the industry grow and facilitate communication and exchange of information, for example:
Luxembourg legislation offers a large choice of alternatives for setting up private equity investment vehicles. The most commonly used investment vehicle for private equity and venture capital is the Société d’Investissement en Capital à Risque (“SICAR”). It is a very flexible, lightly regulated, private equity vehicle. It can include multiple ring-fenced investment compartments, each with their own specific investment policy, or be dedicated to holding one asset. Its flexibility and simplicity demonstrate Luxembourg’s commitment to remaining attractive to industry.
Other lightly regulated fund structures, such as the Specialized Investment Fund (SIF) and unregulated Société de Participation Financière (SOPARFI), represent interesting alternatives. The SIF may invest in all types of assets, the main requirement being that the principle of risk spreading is observed.
KPMG Luxembourg has developed a range of services with a single-minded goal of helping our clients cut through complex issues in the increasingly sophisticated environment in Luxembourg and seize business opportunities and deliver clear and practical solutions.
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