LUXEMBOURG Law and Practice Contributed by: Frédéric Feyten, Alejandro Dominguez Becerra, Gérard Maîtrejean and Pawel Hermeliński, CMS
cedures as well as training programme, proportionate to the nature, specificities and size of the vehicle, in compliance with all legislative and regulatory provi - sions applicable in Luxembourg. A SIF is also required to appoint two different per - sons to carry out its AML/CFT obligations in terms of compliance and control of the compliance. The CSSF must be notified of these appointments. Documentation for the investors and reporting requirements A SIF must prepare an offering document which is subject to approval by the CSSF. While the SIF Law does not detail the minimum content of this docu - ment, the offering document must nonetheless pro - vide all information necessary to enable investors to make an informed assessment of the proposed investment, with particular emphasis on the associ - ated risks. Additionally, the offering document must include any specific disclosures required by the CSSF or requested by specific laws and regulations, which may vary depending on factors such as the legal structure of the SIF and the investment strategy. Although it is not mandatory to continuously update the offering document, its essential elements must be revised whenever new securities or partnership inter - ests are proposed to new investors. Furthermore, any modification to the offering document is subject to the prior approval of the CSSF. If units, shares, or partnership interests of a SIF are made available within the European Union to well- informed investors who do not meet the definition of professional investors under MiFID, a key informa - tion document (KID), prepared in accordance with the requirements of the PRIIPs Regulation, must be provided to such retail investors prior to any offer or subscription of units, shares, or partnership interests. The SIF needs to publish an audited annual report within six months following the end of the financial period to which the report pertains. The SIF Law includes an appendix detailing the specific informa - tion required in this report. It details qualitative and/ or quantitative information regarding the investment portfolio to enable investors to assess the SIF’s per -
formance and the development of its activities. A semi-annual report shall not be prepared or published. Lastly, SIFs are not subject to the requirement to pre -
pare consolidated accounts. 4.2 Succession Planning
The same vehicles used for tax and estate planning in 3.1 Types of Trusts, Foundations or Similar Entities are also used for succession planning. The choice will depend on the needs and objectives of each family. 4.3 Transfer of Partial Interest In Luxembourg, the transfer of a partial interest in an entity – whether during the lifetime of the owner or upon their death – can trigger several types of “trans - fer taxes”, depending on the circumstances of the transfer. The main taxes to consider are inheritance tax and gift tax. The applicable rates depend on the relationship between the parties. Generally, the fair market value of the partial interest transferred is not adjusted to reflect a discount for lack of marketability and control. At present, no specific trends or emerging patterns are clearly identifiable as driving wealth disputes in Luxembourg. There is a slight increase in the use of alternative dis - pute resolution methods, such as mediation or arbitra - tion, as parties look for a faster and more confidential means of settlement. 5.2 Mechanism for Compensation Luxembourg has not established specific mecha - nisms for compensating parties aggrieved in wealth disputes. The general principles of compensation thus apply. 5. Wealth Disputes 5.1 Trends Driving Disputes Typically, the aggrieved party is entitled to finan - cial compensation to cover the damages effectively incurred. Punitive damages are not provided for under Luxembourg law.
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