Luxembourg Structure Set-Up

An SCSp — société en commandite spéciale — is a legal form. A RAIF — reserved alternative investment fund — is a fund regime. A RAIF can be set up as an SCSp, but an SCSp is not a RAIF unless its constitutive documents place it under the RAIF Law.

No. An SCSp has no legal personality separate from its partners, which is one of the main distinctions between it and corporate forms such as an SARL or SA. This affects how it contracts, how it is treated for various regulatory purposes and, notably, how it is liquidated.

Because they are governed largely by their limited partnership agreement (LPA), which gives sponsors and investors wide latitude over governance, economics, distributions and transfer mechanics. That flexibility suits private equity, venture capital, real estate and other alternative strategies. The corollary is that the LPA does the heavy lifting: whatever it fails to address will not be supplied by a statutory default.

No. The prior question is whether the SCSp qualifies as an alternative investment fund (AIF). If it does, the Alternative Investment Fund Managers Directive (AIFMD) framework has to be considered, and the specific alternative investment fund manager (AIFM) requirements then depend on the structure, the manager and the applicable exemptions and thresholds. If it does not qualify as an AIF, the question does not arise.

A RAIF operates under its own Luxembourg statutory regime but is not subject to product approval and ongoing prudential supervision by the CSSF in the way a specialised investment fund (SIF) or an investment company in risk capital (SICAR) is. It remains subject to the RAIF Law and to the AIFM architecture, including the requirement to appoint an authorised external AIFM. Less supervision at product level, not less regulation overall.

Depending on its legal and regulatory status: an AIFM, a central administrator, a depositary, an approved statutory auditor, a domiciliation agent, a bank, directors or managers, and legal, tax and compliance advisers. The regulatory status of the vehicle determines which of these are mandatory and which are a matter of choice.

Before launch. FATCA and CRS classification, AML/CFT governance, the RR and RC appointments, investor onboarding processes and asset-side AML need to be designed into the operating model rather than retrofitted after the first capital call. Retrofitting is where remediation costs come from.

The sponsor, on legal and tax advice, weighing the investment strategy, investor requirements, governance model, intended regulatory status, financing arrangements and the intended use of the entity. There is no default answer, and the choice is hard to unwind cheaply once investors are in.

That the vehicle can actually function the day after it is incorporated: service providers appointed and contracted, bank accounts open and operational, governance procedures and delegated authorities in place, AML/CFT arrangements working, FATCA and CRS classification determined, reporting responsibilities allocated by name, signing processes agreed, and the operational agreements consistent with each other. A structure can be legally established and operationally unable to make a capital call.

Underestimating bank account timelines. Leaving FATCA/CRS classification and the RR/RC appointments until after launch. Legal agreements and the operating model that diverge, so nobody is actually performing a function everybody assumes is covered. And an LPA that is silent on something the parties later need it to answer.

No, and no single provider can. Amana does not replace the lawyers, notaries, tax advisers, AIFMs and other regulated providers a structure requires. What Amana does is coordinate the governance and operational workstreams and make sure the providers and the agreements produce an operating model that actually works.

Amana generally agrees a fixed project fee for structure set-up and coordination through to operational readiness. The fee depends on the complexity of the proposed structure, the number and type of Luxembourg entities involved, the regulatory framework, the number of service providers to be coordinated and the scope of governance, AML/CFT, FATCA/CRS and operational work required before launch. The objective is to agree the scope and price upfront so that the client has cost certainty throughout the set-up process. Fees charged by third-party providers — such as legal counsel, notaries, AIFMs, administrators, depositaries, auditors, banks or tax advisers — are separate from Amana’s fee and are normally contracted and paid directly by the client.

If the structure or agreed scope changes materially during the project, any resulting change in Amana’s fee would be discussed and agreed with the client in advance.

Further reading: our note on setting up a Luxembourg structure, and, on the reporting obligations that follow, our FATCA and CRS FAQ and FATCA and CRS note.