Securitisation Vehicles in Luxembourg
Updated on Friday 11th August 2017
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Securitisation in Luxembourg refers to an investment operation through which the investors will issue transferable securities related to loans and other liabilities. The procedure is performed through a securitisation vehicle, which is set up for pooling assets that will generate a predictable cash flow. Investors interested in how to start a fund in Luxembourg as a securitisation vehicle will have to transform the fund’s assets into securities, such as shares or bonds, which will later on be sold to other investors.
Register a securitisation vehicle in Luxembourg
A securitisation vehicle in Luxembourg can be set up as one of the following:
The procedure on how to start a fund in Luxembourg registered as a securitisation company stipulates that the business form may be registered as one of the following legal entities:
• public limited company;
• joint stock company;
• private limited company;
• cooperative limited by shares.
Under the Luxembourg legislation, the securitisation vehicle is considered to be a business form without a legal personality and in this case, the investors are required to appoint a management company that must be registered as a commercial company.
These types of investment funds are regulated under the Luxembourg Securitisation Law 2004.
Securitisation in Luxembourg
Foreign investors who want to invest in Luxembourg may set up a wide range of investment funds, such as an investment company with variable capital or a hedge fund startup, as there are numerous prospects related to the financial market. Businessmen should also know that the securitisation market in Luxembourg is rather developed as, in 2016, more than 1,000 securitisation vehicles were registered in the country.
The Commission de Surveillance du Secteur Financier (CSSF) mentioned that the securitisation market will further increase in Luxembourg in the following years.
Types of securities in Luxembourg
In order to start a fund in Luxembourg incorporated as a securitisation vehicle, the investors should invest in the following types of assets:
• commercial loans;
• mortgage loans;
• consumer loans;
• lease and trade receivables;
• debt securities;
• intellectual property rights.
Our team of affiliates in Luxembourg may provide more details on the tax regulations or the capital requirements available for a securitisation vehicle. Please contact our partners for financial advice.