Luxembourg: SICAR-Law Amended and Modified

Luxembourg: SICAR-Law Amended and Modified

Samia Rabia
Wildgen, Luxembourg

In recent years, Luxembourg has become one of the favoured locations for private equity funds. With the new law on the investment companies in venture capital (SICAR), its status is now greatly enhanced.

On 15 October 2008, Luxembourg’s Parliament passed a new law containing a number of amendments to the original SICAR law.

The SICAR, a flexible and tax neutral structure, designed as a vehicle for venture capital and private equity

The recently implemented changes reflect experiences encountered since the introduction of the SICAR, the most important of which is introduced below.

Overall it appears that the legislator aimed at streamlining the SICAR and the SIF (Specialised Investment Fund). While they still address different types of investment strategy, the SICAR now resembles the SIF much closer than before as far as structural issues are concerned. SICARs may now also be set up as umbrella funds. The utilisation of sub-funds enables SICAR managers to run different strategies within a single entity and to benefit from the advantage of the segregation of assets and liabilities between the various sub-funds.


  • Share premiums may, from now on, be taken into account when calculating the SICAR’s minimum capital of € 1 million.
  • The list containing a number of specified control duties for which the depositary was responsible has been removed.
  • The definition of ‘well-informed investor’ has been harmonised with the 2007 SIF Law’s definition.
  • It has been made clear that neither the SICAR’s managers nor managers involved with the SICAR’s management need to meet the well-informed investor criteria.
  • Investors no longer need to be compulsory informed about the net asset value on a half-yearly basis.
  • Prospectuses and annual report only need to be ‘prepared’ and available to investors rather than having to be published. Annual reports must be available within six months of the period to which they relate.
  • From now on, a SICAR, irrespective of the legal form chosen, may decide that its capital shall at all times be equal to its net asset value.

While the new law abolishes constraints and makes the legal framework more flexible, the SICAR remains a regulated vehicle, subject to supervision by the Commission for the Supervision of the Financial Sector (Commission de Surveillance du Secteur Financier (CSSF)). This provides the SICAR with a certain state guarantee that often attracts investors particularly in the current climate of financial instability.

With this and other measures Luxembourg manages to achieve a good balance between a flexible legal framework and state supervision which makes it the perfect place to invest in private equity.