RAIF INVESTMENT FUNDS

For investors around the world, Luxembourg offers a safe and attractive investment environment. Its political and economic stability as well as its regulatory framework have always been fertile ground for new and innovative financial solutions and services right in the heart of Europe. Today, Luxembourg is a major centre for alternative investments. The Reserved Alternative Investment Fund RAIF is a perfect example.

The Reserved Alternative Investment Fund RAIF is an unregulated collective investment vehicle in Luxembourg.

It is subject to the AIFM Directive, which aims to create a standardized regulatory framework for alternative funds distributed in the European Union.

In practical terms, the RAIF can invest in any asset class: real estate, private equity, infrastructure, debt acquisition and all types of listed securities. The RAIF is basically aimed at well-informed investors, particularly institutional investors. But in practice, large families and private investors have started to set up RAIFs. Large families - alone or as a group (in the form of a club deal - such as "Family and Friends") have started to structure RAIFs for their real estate and private equity investments, as well as other assets such as artworks and collector cars.

• By default, the “FIS” system applies, whereby the fund is not subject to corporate tax but to a basic subscription tax of 0.01% of the net assets invested in the fund.

• And optionally the "SICAF" regime if the purpose of the fund is to invest predominantly in capital risks. In this case, the RAIF is subject to corporate tax under certain conditions.

The RAIF is part of the Luxembourg legislator's efforts to provide a neutral tax framework for investors. As a result, there is no withholding tax on RAIF dividend distributions, capital gains or liquidation surpluses. And if the RAIF is incorporated as a company, it is eligible for most tax treaties signed by Luxembourg.