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). Two other popular structures are:
- the specialised investment fund (SIF), a collective investment vehicle designed for institutional, professional and sophisticated investors, and
- the risk capital investment company (SICAR), a structure designed uniquely for vehicles active in the field of venture capital.
Real estate investment vehicles constituted in the form of a collective investment scheme or a risk capital investment company can all adopt a multiple compartment structure.
Non-regulated real estate investment vehicles can chose between four legal forms. Most frequently used are the public limited company (société anonyme - SA) and the private limited company (société à responsabilité limitée - sàrl). As commercial companies, they can benefit from Luxembourg’s double tax treaty network and the EU Directive on the tax regime applicable to parent companies and their subsidiaries.
A real estate investment vehicle can also be constituted as a securitisation vehicle.