European Long Term Investment Funds in Luxembourg
Updated on Wednesday 09th August 2017
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The European Long Term Investment Fund (ELTIF) is a type of investment vehicle that can be incorporated in Luxembourg for investment purposes applicable at European level. The first ELTIF was registered in Luxembourg in 2016 and it was approved by the Commission de Surveillance du Secteur Financier (CSSF) under the European Union’s (EU) Regulations. Investors interested in how to start a fund in Luxembourg as a ELTIF will need to comply with the regulations prescribed under the European Long Term Investment Funds, which stipulates that such vehicles can be registered as alternative investment funds.
Main characteristics of the Luxembourg ELTIF
The ELTIF was established as an investment vehicle under the provisions of the Europe 2020 Strategy, which aims at a high level of employment and sustainable growth.
Businessmen who want to know how to start an investment fund in Luxembourg will have to perform long- term investment strategies in order to register the ELTIF. In this sense, it is necessary to invest at least 70% of the fund’s assets in long-term assets.
Qualifying assets for ELTIFs in Luxembourg
An investment fund registered as a ELTIF will need to invest in one of the following classes of assets:
• real estate;
• debt instruments;
• public buildings;
• sustainable energy;
• listed small and medium sized companies.
Requirements for Luxembourg ELTIFs
As mentioned above, the ELTIF in Luxembourg has to be approved by the CSSF in order to perform its investment strategies in this country or in another European country, a regulation which is available for other types of funds, including a hedge fund startup.
Since the vehicle follows the AIF regulations, it is necessary that the fund to be managed by an alternative investment fund manager registered in Europe. This type of investment fund benefits from the regulations established for European passports and it can raise capital from investors (institutional and retail investors) residing in one of the EU’s member states or in one of the countries which are a part of the European Economic Area.
Foreign investors who want to set up a ELTIF are invited to contact our team of affiliates in Luxembourg for further information on this vehicle, as well as on the tax regulations available for this investment structure.