A THOROUGH UNDERSTANDING OF PRIVATE EQUITY

RETOUR SOMMAIRE

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2010

MAIN ACTORS AND STRUCTURES

Figure 25 – Comparison of the Luxembourg private equity structures

UCI Part II

SICAR

SIF

SOPARFI

SV

Investment funds Act Part II (2002)

SICAR Act (2004), amended by New SICAR Law of October 2008

SIF Act (2007)

Companies Act (1915)

Law of 22 March 2004

Applicable legislation

Forms available: > Securitisation company or securitisation fund

Forms available: > SICAR

Forms available: > SICAV > SICAF

Forms available: > SICAF > Mutual Fund (FCP) > SICAV Legal forms available: > SA > SARL > SCA > SCoSA

Forms available: > Any corporate type of entity

Legal structures

> Mutual Fund (FCP) Legal forms available: > SA (for SICAV and SICAF) > SCA (for SICAF only) > SARL (for SICAF only)

Legal forms available: > Any corporate type of entity

Legal forms available: > Securitisation company: - SA - SARL - SCA - Cooperative society in the form of a PLC > Securitisation funds: - Co-ownership (mutual) fund - Fiduciary (trust) fund

Legal forms available: > SA > SARL

> SCA > SCS > SCoSA

Unrestricted

Well-informed investors (i.e. institutional or professional investors or other investors with min investment of E 125,000)

Well-informed investors (i.e. institutional or professional investors or other investors with min investment of E 125,000)

Unrestricted

Unrestricted

Eligible investors

Unrestricted (subject to CSSF prior approval)

Risk capital

Unrestricted

Unrestricted

No limitation as to type of assets or risks that can be securitised; No active management of the assets

Eligible assets

Yes (in principle, investment in any target company may not exceed 20% of the NAV)

No (e.g. may serve as a feeder for a Luxembourg or foreign vehicle)

Yes A SIF cannot invest more than 30% of its assets or commitments to subscribe into instruments of the same nature issued by the same issuer (Circular 07/309)

No

No

Risk diversification requirement

Borrowing restrictions 25% of NAV

No limitation

No limitation

No limitation

No limitation (if SV is substantially financed by the issuance of securities)

E 1.25m to be reached within 6 months following approval

E 1m to be reached within 12 months following approval

E 1,25m to be reached within 12 months following approval

E 12,500 for SARL or E 31,000 for SA/SCA

Not required for contractual form

Minimum capital requirements

Yes

Yes

Yes

No

Both cases possible

Regulated structure Yes / No Supervision Authority

CSSF

CSSF (light supervision) CSSF (light supervision) No supervision

CSSF in case of regulated securitisation vehicles (the SV may exist as a non-regulated entity or as a regulated entity) Irrelevant as the SV may also exist as a non regulated entity Securitisation funds are neither subject to corporation taxes nor to the annual subscription tax ("taxe d’abonnement"). Securitisation companies are subject to corporate income tax and municipal tax, however all recorded liabilities towards investors and all other creditors are a deductible expense.

651 as at 30/11/2009 (includes all funds, not only private equity) Part II funds are subject to an annual subscription tax ("taxe d’abonnement") of 0.05% p.a. of their NAV. Classes of shares which are reserved for Institutional Investors are subject to a subscription tax at a reduced rate of 0.01%.

239 as at 31/12/2009 (includes all funds, not only private equity) Fiscally opaque SICARs (i.e. all SICARs except those established under the form of an SCS) are fully taxable.

964 as at 30/11/2009 (includes all funds, not only private equity) SIFs are subject to an annual subscription tax ("taxe d’abonnement") of 0.01% p.a.of their NAV. Unlike FCPs, SICAV/Fs can benefit from certain double tax treaties. Investments may be made through fully taxable subsidiaries benefiting from double tax treaties and the EU parent-subsidiary directive.

Not applicable

Number of structures recorded by the Supervisory Authority

SOPARFIs are fully taxable companies, subject to an aggregate corporation tax burden which currently amounts to 28.59%. However, SOPARFIs can benefit from exemptions to corporation tax for dividends received from share-holdings, capital gains made on the sale of share-holdings and gains made on liquidation of companies in which shares are held.

Tax regime

page 44 | A thorough understanding of PE