Real estate investment vehicles
The Luxembourg financial centre is one of the principle European domiciles for vehicles investing in an international real estate portfolio.
The legal and regulatory framework offers a wide range of regulated and unregulated structures that can be adapted to the needs and preferences of investors.
Most Luxembourg real estate funds are regulated collective investment schemes, either incorporated as an open ended investment company (société d’investissement à capital variable – SICAV) or a closed ended investment company (société d’investissement à capital fixe - SICAF), or else as a common investment fund (fonds commun de placement - FCP).
Two other popular real estate vehicles are the specialised investment fund (SIF) and the risk capital investment company (société d’investissement en capital à risque - SICAR) which may only be used in a venture capital environment.
All these vehicles may adopt a multiple compartment structure, which enables the promoter to follow different investment strategies and/or different distribution strategies within one legal structure.
The most frequently used non-regulated vehicle is the limited company (société anonyme - SA) and the public limited company (société à responsabilité limitée - sàrl). A real estate investment fund can also be set up as a securitisation vehicle.
The choice of the most appropriate structure depends on a number of factors including the type of assets to be collected, the target investor group, the applicable tax regime and the target investments.