INVESTMENT FUNDS IN POLAND, LUXEMBOURG, AND THE NETHERLANDS

WHO SHOULD START THE FUND IN LUXEMBOURG?

If you are thinking of acquiring funds from investors from different markets, and if you need a prestigious structure to talk to the founders of companies from around the world, then the Luxembourg fund will be a good solution. Luxembourg is a global financial service centre and the world’s most popular (after the US) location for investment funds. Luxembourg funds are flexible in registration and use and offer a quick prospect of entering the market.

As a result, Luxembourg is an ideal place for many types of funds, including venture capital, umbrella, hedge, private equity, real estate or family office structures.

BENEFITS OF THE FUND IN LUXEMBOURG

1. INVESTMENT FLEXIBILITY The ability to adapt the fund structure to your goals. A wide range of asset classes, including ordinary shares and bonds, as well as innovative strategies for infrastructure, renewable energy, precious metals and much more.
2. SIMPLE ADJUSTMENTS. Compliance with UE regulations. Highly standardized processes, acceptable worldwide. The possibility of obtaining recapitalisation from European funds.
3. LOW TAX. The Fund shall not be subject to any taxes on capital gains or income earned in Luxembourg. Favourable tax system especially for non-residents.
4. BRAND. Improved perception of the fund on international markets. Among investors from all over the world and funds from overseas. First of all, due to the predictability of processes and their high flexibility. In addition, Luxembourg ranks FIRST in the EU Member States in terms of business conduct and compliance with EU law and regulations
5. ACQUISITION OF CAPITAL/EXIT. Funds such as AIFs, RAIFS and UCITS can be listed on Luxembourg’s stock exchange and other recognised EU stock exchanges.

WHY LUXEMBOURG?

Luxembourg is the largest and best-known location for investment funds in Europe and the second largest after the United States headquarters of funds in the world. The value of the assets managed by funds registered in Luxembourg as at 30 November 2021 is EUR 5 749 billion. 

Luxembourg’s investment fund sector is a global leader in the cross-border distribution of funds. Luxembourg-based investment structures are distributed in more than 70 countries worldwide, with a special focus on Europe, Asia, Latin America and the Middle East. Many Luxembourg funds use the so-called European passport, which allows funds (and their managers) complying with the UCITS Directive or the Alternative Investment Fund Managers Directive (the Alternative Investment Fund Managers Directive) to be marketed to investors in the European Economic Area (EEA), following a simple notification procedure.

THE MOST FREQUENTLY SELECTED STRUCTURES OF THE LUXEMBOURG FUNDS:

• LUXEMBOURG’S PROPRIETARY ALTERNATIVE INVESTMENT FUND (RAIF)
  
  The RAIF structure was introduced in 2016 and combines the features of Luxembourg’s most popular fund structures, SIF and SICAR, until then.RAIF are limited to well-informed and professional investors. 
  
  RAIF aims to minimise the planning uncertainty that may arise during the mobilisation of funds by eliminating the need for prior authorisation and ongoing direct prudential supervision by the CSSF. 
  
  This specific structure has a low tax of 0.01% of the net asset value. However, if RAIF invests exclusively in risk capital, it may opt for taxation as in the case of SICAR. 
  
  RAIF can be set up and run in a simplified process (typically 4-6 weeks) as it is not supervised by CSSF. RAIF is subject to the AIFMD and is supervised by an authorised EU alternative investment fund manager (AIFM) and benefits from marketing across the EU using the provisions on the European passport.

• LUXEMBOURG SPECIALISED INVESTMENT FUND (SIF).
  
  SIFs are regulated and tax efficient multifunctional alternative investment funds for all types of investment.
  
  SIF is created in a contractual form, i.e. as an Investment Fund represented by the Managing Company (fonds commun de placement, FCP) or in the form of a company, i.e. as an Investment Company whose capital is variable (SICAV) or fixed (SICAR).
  
  SIFs benefit from a number of tax advantages, including an exemption for investors from capital gains tax, an annual subscription tax of only 0.01% of the net asset value (with some exceptions), an abolition of capital duty on the formation of a company, and investors’ shares are not subject to net value tax. It has a limited right to benefit from double taxation conventions if it is set up as an investment company.

SUPPORT BY PANASIUK & PARTNERS TEAM

We specialize in international investment structures, i.e. in holding companies, investment funds and topics related to law and international taxes for over 20 years. 

1. We will analyze the best structures and markets that meet your investment criteria and objectives.
2. Our team offers full legal and tax support based on specialist knowledge of the local and international dynamics of legal and tax changes.
3. As part of the cooperation, our team manages the entire process of organizing your investment structure, thanks to which we remove the burden of coordinating the international process (we have been doing it for 20 years!). You get space for investment decisions. On our part, you will receive a guarantee of a holistic view of issues arising not only from Polish, Dutch or other markets where investments will be carried out, but also aspects related to the change of tax residence (if such a subject occurs).

WHY THE NETHERLANDS AND WHO IS SETTING UP THE FUNDS HERE?

The Netherlands is a widely used jurisdiction for the creation of investment funds. It has an advanced and flexible legal and administrative system. In addition to a stable business and political environment, the Netherlands has a good tax environment, which makes it an attractive jurisdiction for funds. Moreover, for years the Netherlands has been the gateway to Europe for international capital and it has remained so to this day. The international perception of the Netherlands, its good regulation and simplified investment procedures make it, as usual, very successful. Polish investors are also considering the establishment of a Dutch fund, comparing it with the domestic solution, which is the ALTERNATIVE INVESTMENT FUND. 

The Netherlands is an excellent location for private equity and venture capital funds. It is typically used by fund managers who operate “in” the Netherlands and “from” the Netherlands. It happens that holding structures are also used in the structuring of investments from the ocean. Currently, however, also due to changing regulations, a large amount of operational presence in the Netherlands is necessary.

BENEFITS OF THE FUND IN THE NETHERLANDS

1. A SYSTEM FRIENDLY TO FOREIGN INVESTORS. The opening of an investment fund in the Netherlands means the possibility of benefiting from a friendly tax regime, an extensive network of international tax treaties and openness to foreign investments.
2. DIFFERENT POSSIBILITIES OF SOLUTIONS for FUNDS. There are several types of fund structures for professional and non-professional investors in the Netherlands.
3. RELIEVED REGISTRATION REQUIREMENTS. Special licences should be obtained for certain Dutch investment funds. There are also structures that do not require special permission.
4. FLEXIBILITY OF THE STRUCTURE. The Fund may be established by registering corporate structures such as limited liability companies or non-corporate structures such as limited partnerships.
5. INITIAL CAPITAL – HIGHER REQUIREMENTS THAN IN POLAND. In terms of share capital, the minimum required amount starts at EUR 125,000, and investors must also contribute EUR 100,000 to the fund.

THE MOST FREQUENTLY SELECTED STRUCTURES OF DUTCH FUNDS:

There are several types of investment funds that are regulated in the Netherlands: UCITS (Undertakings for Collective Investment in Transferable Securities) and AIF (Alternative Investment Funds). There are other types of funds in the Netherlands, but they are rarely used. 

All structures are regulated at EU level and one of the most important provisions is the Alternative Investment Fund Managers (AIFMD) Directive on Alternative Investment Fund Managers (AIFM).

• ALTERNATIVE INVESTMENT FUND (AIF) In the NETHERLANDS
  
  Out of all investment funds in the Netherlands, AIF are among the preferred by foreign investors. They are usually organised in the form of a limited partnership (commanditaire). They may also take the form of cooperatives, pooled funds, private limited liability companies or a combination of pooled funds and limited liability companies. 
  
  AIF are the main category of funds regulated by national legislation and include other structures that investors can use to generate profits. These include hedge funds, debt funds and real estate funds.

• COLLECTIVE INVESTMENT FUNDS IN the NETHERLANDS 
  
  Another type of investment funds in the Netherlands are collective investment funds. Funds such as UCITS are often set up as FGRs or public limited companies (NVs) with a legal designation of investment institutions with variable capital. 
  
  Both the open FGR and the NV are suitable for the creation of umbrella funds as well as open and closed funds. Both NV shares and shares in the FGR can be quoted on the stock exchange. 
  
  It is good to know that investment funds in the Netherlands are subject to different share capital requirements depending on whether the fund manager is licensed or not and whether the fund is supervised by the Office for Of the Financial Market and by the Dutch National Bank. The minimum share capital requirements for open-end and closed-end funds are EUR 125,000 if the assets under management are less than EUR 250 million and EUR 225,000 if the assets are worth more than EUR 250,000 million. Investors are also required to contribute at least EUR 100,000 to the fund.

SUPPORT BY PANASIUK & PARTNERS TEAM

We specialize in international investment structures, i.e. in holding companies, investment funds and topics related to law and international taxes for over 20 years. 

1. We will analyze the best structures and markets that meet your investment criteria and objectives.
2. Our team offers full legal and tax support based on specialist knowledge of the local and international dynamics of legal and tax changes.
3. As part of the cooperation, our team manages the entire process of organizing your investment structure, thanks to which we remove the burden of coordinating the international process (we have been doing it for 20 years!). You get space for investment decisions. On our part, you will be guaranteed a holistic approach to the issues arising not only from Polish and Dutch law or other markets where investments will be carried out, but also from aspects related to the change of tax residence (if such a subject occurs).