The law of 12 July 2013 relating to alternative investment fund managers ('AIFM Law'), which implements the EU AIFM Directive (2011/61/EC) in Luxembourg, entered into force on 15 July 2013.
In this context, on 18 July 2013 the Luxembourg regulatory authority of the financial sector ('CSSF') issued press release 13/32 in which it requires any legal person established in Luxembourg that potentially qualifies as an AIFM under the AIFM Law to perform a self-assessment in order to:
- assess whether it qualifies as AIFM under the AIFM Law, keeping in mind that:
- an external manager of an AIF qualifies as a so-called 'External AIFM';
- a non-regulated AIF, Part II fund, SIF, or SICAR that has not chosen to appoint an external manager qualifies as a so-called 'Internal AIFM'.
- assess whether it is subject to authorisation or registration requirements, in accordance with the provisions of the AIFM Law:
- Luxembourg AIFMs existing and performing activities within the meaning of the AIFM Law before 22 July 2013 and which have to be authorised under the AIFM Law (i.e., AIFMs whose aggregate assets under management exceed the EUR 100/500 million thresholds referred to Article 3(2) of the AIFM Law and which are not excluded, or exempted, under the AIFM Law) must apply for authorisation as an AIFM by 22 July 2014 at the latest by using the authorisation form available on CSSF's website (http://www.cssf.lu/aifm);
- Luxembourg AIFMs existing and performing activities within the meaning of the AIFM Law before 22 July 2013 and which have to be registered under the AIFM Law (i.e., so-called 'small AIFMs' whose aggregate assets under management do not exceed the EUR 100/500 million thresholds referred to above and which do not decide to opt-in under the AIFM Law) must register immediately with the CSSF by using the registration form available on CSSF's website (http://www.cssf.lu/aifm).
In addition, if as a result of the above assessment, it is concluded the legal person in question is an AIFM, it must communicate the following information to the CSSF (email@example.com) by 16 August 2013 at the latest:
- Name of the AIFM;
- Address of the AIFM;
- Information on whether the AIFM is an Internal AIFM or an External AIFM; and
- Information on whether the AIFM has to be registered by or authorised with the CSSF.
In order to perform the self-assessment, it may be helpful to refer to the CSSF “Frequently Asked Questions” concerning the AIFM Law dated 19 July 2013 (http://www.cssf.lu/aifm).
The AIFM Law in a nutshell: another reason to choose Luxembourg
Aside from a straightforward implementation of the EU AIFM Directive (2011/61/EC), the AIFM Law mainly affects the following regulated alternative investment funds and amends their governing laws accordingly:
- specialised investment funds governed by the law of 13 February 2007;
- undertakings for collective investment governed by Part 2 of the law of 17 December 2010 relating to undertakings for collective investment; and
- investment companies in risk capital governed by the law of 15 June 2004 relating to investment companies in risk capital.
Further enhancing Luxembourg's attractiveness for alternative investment funds, the AIFM Law offers a true alternative to the ever-popular English limited partnership with the amendment of the law of 10 August 1915 on commercial companies to:
- introduce a 'special limited partnership' (société en commandite spéciale) regime; and
- modernise the rules applicable to common limited partnerships (sociétés en commandite simple) and partnerships limited by shares (sociétés en commandite par actions).
The AIFM Law also amends the law of 5 April 1993 on banking through the creation of a new category of financial sector professional: the 'professional depositary of assets other than financial instruments'. This will allow professionals without a full banking licence to act as depositary to certain Luxembourg alternative investment funds.
The AIFM Law contains specific tax provisions introducing a favourable (but temporary) tax regime for carried interest, with the aim of reinforcing Luxembourg's position as a prime location for alternative investment funds and alternative investment fund managers. Furthermore, the AIFM Law provides for an exemption from corporate income tax, municipal business tax and net wealth tax for alternative investment funds established outside Luxembourg, but with an alternative investment fund manager in Luxembourg. Finally, the AIFM Law extends the value added tax exemption applicable to the management of regulated funds and securitisation vehicles to the management of alternative investment funds.