Real estate investment vehicles
Institutional, professional and private investors interested in creating an international real estate portfolio will find a range of sophisticated investment vehicles in Luxembourg to meet their needs and specific preferences. The diversity and flexibility of these alternatives has made Luxembourg the premier European domicile for international real estate investment vehicles.
A real estate investment vehicle can either be set up as a non-regulated entity (a commercial company) or as an entity regulated by the CSSF (for instance, a collective investment scheme). The choice will depend on the method by which capital is to be raised, the type of investor targeted, the investments to be made and particular tax considerations.
Most Luxembourg real estate funds are regulated collective investment schemes, either set up as a company (a variable capital investment company - SICAV, or a fixed capital investment company - SICAF) or as a common investment fund (fonds commun de placement - FCP).
The specialised investment fund (SIF), reserved for use by institutional, professional and well-informed investors, and the investment company in risk capital (SICAR), a vehicle designed uniquely for venture capital and private equity investment, are two other structures that are very popular for real estate investment.
All these vehicles can be set up with a multiple compartment structure, enabling the creation of sub-funds with different investment and/or marketing strategies within one legal structure.
The legal forms most commonly used for non-regulated vehicles are the public limited company (société anonyme - SA) and the private limited company (société à responsabilité limitée - sàrl). A real estate investment vehicle can also be constituted as a securitisation vehicle.
The choice of the most appropriate structure will largely depend on the type of funding, the target investors, their tax situation and the type of investments planned.