LUXEMBOURG Law and Practice Contributed by: Claire-Marie Darnand, Victorien Hémery, Johan Léonard, Benjamin Marthoz and Tom Storck, Stibbe
5.3 REITs There is no specific REIT legislation in Luxem - bourg. 5.4 Minimum Capital Requirement There is no minimum share capital requirement for the common limited partnership or the spe - cial limited partnership. Public limited liability companies must have a minimum share capi - tal of EUR30,000, or its equivalent in any other currency; the same requirement applies to a partnership limited by shares. The share capital of a private limited liability company must be at least EUR12,000, or its equivalent in any other currency. Luxembourg investment fund regimes impose different requirements in terms of minimum capi - talisation: • UCIs Part II – the net asset value of a UCI Part II may not be less than EUR1.25 million, and this minimum must be reached within twelve months following its authorisation; and • SIFs/RAIFs/SICARs – the subscribed capi - tal of a SIF/RAIF/SICAR increased by the share premium or the value of the amount constituting partnership interests, or the net asset value of a SIF/RAIF under contractual form, may not be less than a certain amount (EUR1.25 million for SIFs and RAIFs, or EUR1 million for SICARs), which must be reached within twenty-four months of the authorisa- tion of the SIF or SICAR or establishment of the RAIF. 5.5 Applicable Governance Requirements Public Limited Liability Company Under Luxembourg law, public limited liability companies can have either a one-tier or a two- tier board structure.
With respect to investment fund regimes, invest - ment funds subject to the ongoing supervision of the CSSF (ie, UCIs Part II, SIFs and SICARs) have to be authorised by the CSSF before they are established, and will only be authorised if the CSSF has approved the constitutive document of the fund, the management and the choice of the depositary. The regulatory approval process usually takes between two and six months, depending on the fund regime and the initiator and fund specifics. These vehicles, except for the SICAR, are exempt from corporate income tax, municipal business tax and net wealth tax, but are subject to subscription tax. Typically, UCIs are subject to subscription tax at a rate of 0.05% of their net asset value and SIFs at a rate of 0.01% of their net asset value (subject to exemptions). Additionally, these vehicles, except for the SIC - AR, are subject as of 1 January 2021 to a lump- sum 20% real estate levy on gross rental income and capital gains derived from real estate assets located in Luxembourg. SICARs established as tax opaque entities are subject to corporate income tax and munici - pal business tax at a combined rate of 24.94% in Luxembourg City for 2024, but are exempt from income derived from transferable securi - ties. Although not subject to net wealth tax, those vehicles remain subject to minimum net wealth tax. SICARs established as tax transpar - ent entities are not subject to corporate income tax (except where reverse hybrid rules apply), municipal business tax, net wealth tax or sub - scription tax.
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