Private Equity in Luxembourg (2014)

2014 Edition
LUXEMBOURG PRIVATE EQUITY & VENTURE CAPITAL ASSOCIATION

L U X E M B O U R G P R I VAT E E Q U I T Y & V E N T U R E CA P I TA L A S S O C I AT I O N
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1. Foreword 4
2. Luxembourg – a conducive environment for Private Equity 6
3. Private Equity in Luxembourg 8
3.1. Background and historic evolution 9
3.2.Typical Luxembourg Private Equity structures 11
3.3. General Partners 12
3.4. Middle Offices 12
3.5. Back Offices 12
4. The Luxembourg Tax Environment 13
4.1. Direct taxation of corporations 15
4.2. Miscellaneous charges or fees 18
4.3. Personal income taxation 19
5. Private Equity – Legal Framework 20
5.1. Luxembourg Private Equity unregulated and regulated structures 20
5.2. Important aspects of Luxembourg Private Equity vehicles 21
5.3. Structuring by means of Luxembourg Vehicles 23
5.4.Thematic funds 26
5.5. Sharia compliant structures 26
6. Accounting Framework for Luxembourg PE Vehicles 27
6.1.Accounting Standards 27
6. 2.Valuation Rules 27
6.3. Consolidation 28
6.3.1. Unregulated Vehicles 28
6.3.2. Regulated Vehicles (SICARs and SIFs) 29
6.4. Profit Repatriation 29
7. The Alternative Investment Fund Managers Directive 30
8. The Regulation on European Venture Capital Funds 31
9. Private Equity Services Provision 32
9.1. Context and overview 32
9.2. Depositary Services 32
9.2.1. Monitoring function 32
9.2.2. Safekeeping of assets 32
9.3. Banking services 33
9.4. Legal, tax and audit services 33
10. How to set up a Private Equity Fund in Luxembourg 34
11. Glossary 36
12. Useful References 38
13. List of LPEA Members 39
Private Equity Firms 39
Private Equity Services Providers 40
TABLE OF CONTENTS

1 . F o r e wo r d
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1. Foreword
Luxembourg has now built up a leading
position in Europe as the jurisdiction of choice for the
Private Equity industry. From a handful of players in
2000, Luxembourg is home today to over 60 Private
Equity firms with most of the large European GPs and
many of the large US GPs now having established
operations in Luxembourg. According to LPEA
estimates the industry’s assets under management
in Luxembourg amount to over $258 billion, a figure
we expect to continue increasing as new players
discover the many advantages this domicile offers.
Multiple factors have been contributing to the
industry’s growth. Besides a legal toolbox second to
none (funds, AIFMs, SPVs), political and economic
stability and predictable taxation on the back of
an unrivalled financial infrastructure, Luxembourg
boasts a business friendly attitude, combined with
a strong governmental commitment towards Private
Equity.
While a wide range of Private Equity and Venture
Capital funds have used Luxembourg’s SPV structure
and double taxation treaty network as a hub for their
cross-border investments, making their structuring
both efficient and neutral, a growing number of firms
are setting up middle and front office operations in
Luxembourg to benefit from Luxembourg’s critical
size and expertise as Europe’s leading AIFM-UCITS
center.
J é r ô m e W i t t a m e r
P r e s i d e n t
About the Luxembourg Private Equity & Venture Capital Association
The Luxembourg Private Equity and Venture Capital Association (LPEA) is a member-based, non-profit trade
association established in 2010, covering the whole range of Private Equity from Venture Capital (seed, start-up
and development capital) to buy-outs and buy-ins.
LPEA represents, promotes and protects the interests of the Luxembourg Private Equity and Venture Capital
industry. It is both a contributor to the country’s private equity regulation and a key player in the preparation of
the market players to the sector’s challenges. LPEA is a member of the Luxembourg for Finance initiative and
represents Luxembourg within the European Private Equity and Venture Capital Association (EVCA).
This brochure aims to provide Private Equity
professionalsandtheiradviserswithacomprehensive
yet focused overview of the general business, legal,
tax and regulatory environment that Luxembourg
offers to the Private Equity industry. Whether you
are exploring Luxembourg for the first time or you
are refreshing your knowledge, we trust you will find
this brochure useful and we at the LPEA are at your
disposal to provide you with any further information
needs you may have.

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According to the latest Global Financial
Centres Index, published in September 2014,
Luxembourg ranks as the leading financial centre in
the Eurozone. Luxembourg is also well known as the
world’s leading centre for the crossborder distribution
of investment funds, now with over 3 trillion euro of
assets under management. What is less well known,
is that Luxembourg represents a recognized hub
for Private Equity investments within Europe and
worldwide.
In fact, Luxembourg’s Private Equity industry is
thriving. Nine out of ten of the world’s largest fund
managers are operating out of Luxembourg. The
reasons are obvious.
Luxembourg benefits from unparalleled economic,
political and social stability. The country has sound
public finances and ranks among the very few with
a triple A rating. It is widely acknowledged that
Luxembourg has one of the most business friendly
environments anywhere, with authorities that
always keep an open ear for the private sector. The
move towards greater transparency in tax matters
contributes to enhance further Luxembourg’s image
as a well-regulated international financial centre,
and attract additional business.
The Private Equity industry benefits from a clear
legal framework, as well as from an attractive tax
regime. Luxembourg provides fund managers
and administrators with a comprehensive toolbox,
to help them set up and run their investments in
a most efficient manner. Luxembourg law offers
diverse possibilities to set up and structure Private
Equity investments, including both regulated and
unregulated vehicles.
More recently, limited partnerships and alternative
investment funds (as foreseen in the AIFM Directive)
havebeenaddedtotherangeofavailablestructures.
A whole eco-system of local service providers
caters to the investor’s every need, from company
creation and management to administration, from
domiciliation and accounting to compliance and
legal services.
Luxembourg develops into an international hub for
innovation. The start-up scene is growing. Incubators,
accelerators and co-working spaces for start-ups
are popping up all over the country. Innovation
clusters are gaining traction. Public and private
research and development centers are expanding
their operations.
Skype and Wix are probably the most famous among
the many world-class success stories of Luxembourg’s
Private Equity industry. The LPEA plays an important
role in getting the word out that Luxembourg is a
cutting edge location for creating, funding, and
growing innovative business models. Private Equity
funds and their managers play a key role for the
further growth and diversification of Luxembourg’s
financial centre and its economy as a whole.
They also contribute to raise further awareness for
Luxembourg as an international platform from which
to funnel investments all over the world. Luxembourg
plays this central role already with regard to UCITS
funds. Based on that experience and expertise,
Luxembourg is ideally positioned to become one of
the major international players in the Private Equity
area as well. The LPEA and its members are leading
the way, for which they have my recognition and
support.
M r. P i e r r e G r a m e g n a
M i n i s t e r o f F i n a n c e

2 . L u x e m b o u r g – a c o n d u c i v e e n v i r o n m e n t fo r P r i va t e E q u i t y
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2.Luxembourg – a conducive environment for Private Equity
Choosing the right location for Private Equity houses means taking into consideration many
different factors. The following features are Luxembourg’s strengths – the combination of
these strengths makes Luxembourg attractive to Private Equity.
Political & economic stability
The political stability of Luxembourg is marked by a political culture of consensus where the traditional parties
coexist within the context of broad agreement on key issues. In this context, a group of key ministers have been
allowed to remain in government for a significant period of time providing continuity in important policy initiatives
under successive coalition governments, with an emphasis on economic policies. The business-friendly political
environment is conducive to welcoming decision-makers and entrepreneurs. Attracting international players
is considered paramount in building an efficient business framework and economic growth, and has enabled
Luxembourg to establish a permanent and innovative business community. An illustration is the recent special
tax regime for highly skilled workers aimed at attracting a specialized workforce in areas such as Private Equity.
A stable and rewarding tax environment
The tax framework is considered among the most stable and rewarding in Europe for companies, their
shareholders and their employees. This is a key component of Luxembourg’s development. The tax authorities
lead a constructive dialogue with taxpayers, have a business friendly attitude and the quick and pragmatic
approach to the requirements of international investors. Luxembourg is not a tax haven but it offers one of the
most flexible and attractive tax regimes within the EU.
The strength of the Luxembourg financial services industry
Luxembourg is the largest financial centre for investments funds in Europe and the second largest worldwide.
Promoters from 42 countries distribute their Luxembourg funds around the world through more than 42,000
distribution agreements: 72% of authorizations for distribution granted to worldwide funds are allocated to
Luxembourg funds. Luxembourg has been able to turn retail EU funds, the UCITS, into a brand that stands on its
own,not only within Europe but worldwide.In view of the fact that more than 44,000 people are employed in the
financial services industry which contributes around 26% of the gross domestic product (source: CSSF Oct. 2014
and Statec,Nov.2010) it is easily understandable why the financial industry and government are working closely
and smoothly together to ensure continued efficiency. Luxembourg today hosts more than 500 companies
servicing funds, such as central administrators, domiciliary agents, law firms, auditors, consultants, depositaries,
management companies and alternative investment fund managers (AIFM) and many more; an industry that
continues to develop dynamically.
Business-friendly environment
Luxembourg has a unique system of social dialogue that involves regular meetings between the government,
employers’ representatives and unions, which is key to avoiding social conflicts and to reaching consensus on
important decisions regarding economic and social affairs.
Luxembourg was further one of the pioneers to implement Directive 2011/61/EU on alternative investment fund
managers and has largely leveraged on its long-standing and recognised UCITS experience to adapt the private
equity industry to the new regulatory standards and marketing or placement regimes.
Although the initial objective of the G20 and the EU Commission was principally aimed at regulating the
alternative investment industry in order to control and avoid systemic risk, the AIFMD indeed also entails a
European marketing passport for AIFM. Once authorised in a EU Member country, these AIFMs can market the
AIFs they manage to professional investors in all other EU Member countries.
We at KKR first set up our Private Equity structures in Luxembourg almost ten years ago. Luxembourg not only
offers a friendly and efficient workforce of highly educated multilingual people but also a competitive, flexible and
secure business environment. We expect that Luxembourg will strengthen its position as a leading private equity
jurisdiction in the future.
Reinhard Gorenflos, KKR Partner, London

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Luxembourg
In the context of UCITS,Luxembourg has taken advantage of the opportunities given by the passport regime and
has, on that basis, become the leading jurisdiction in the world for retail cross-border distribution. Luxembourg
is therefore currently building on this positive experience and offer the possibility for both AIFM and AIF to use
Luxembourg as their hub for marketing AIFs to professional investors in the EU and, potentially, as is currently the
case for UCITS, beyond the EU.
A considerable number of Luxembourg UCITS management companies have also obtained approval to act
as AIFM, allowing them to manage both UCITS and AIF. These AIFMs, as well as stand-alone AIFMs without UCITS
licenses, offer private equity sponsors a cost-efficient solution, benefitting from the marketing passport.
A strategic position at the heart of Europe
One of the prime features of Luxembourg’s success is its geographical location. Luxembourg profits from a
strategic position at the crossroads of Europe, with direct rail, road and air routes to the largest European cities.
Speed to market – the AIFMD was implemented into Luxembourg
law by the AIFMD Law of 12 July 2013
The AIFMD Law aims at positioning Luxembourg as one of the European first movers. At the same time
the AIFMD Law introduced a number of additional measures that further enhanced the attractiveness
of Luxemburg as a hub for Private Equity
• Creation of a new limited partnership regime and modernization of the existing limited partnership
regime
• Introduction of a specific carried interest taxation regime
• AIFMD related product level regulation (i.e., SIF and SICAR) adjustments
• Introduction of a new category of specialized PSF for AIFs,SICAR and SIF (new professional status for
depositaries of assets other than financial instruments)
• New management company regimes.
At the heart of Europe’s highway network:
Taking the highway, Frankfurt, Cologne and Brussels are
only at a 2 hours’ drive while Munich, Amsterdam, Paris,
Geneva and Zurich can be reached within 4 hours.
Luxembourg is served by an international airport connecting the country to major European business centres.
Luxembourg is at a one – or less - hour flight from London, Paris, Frankfurt, Zurich, Geneva and Milan.
Other direct flights connect Luxembourg to Amsterdam, Berlin, Copenhagen, Dublin, Istanbul, Madrid, Munich,
Stockholm and Vienna.
Efficient train connections:
The TGV brings Paris within a 2 hour reach while Brussels is 2 hours away by standard train.
One hour flight to major European cities:

3 . P r i va t e E q u i t y i n L u x e m b o u r g
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A highly innovative and dynamic center
Alongside one of its main pillars,namely the financial services industry,the Luxembourg government has identified
four major industries as the core sectors to be developed in Luxembourg over the coming years.Major efforts will
be made to attract innovative companies to either start their business in Luxembourg, set up in Luxembourg or
to foster research and development.These key industries are:
• healthcare and clean technology
• telecommunication/media/technology (“TMT”)
• information & communication technology (“ICT”)
• transportation and logistics.
The Luxembourg government has set the goal to develop these industries leveraging on the expertise and
reputation it already has in these fields.
Skilled and multi-lingual workforce
The Luxembourg labour market offers a pool of highly skilled and multilingual resources. With more than 150
nationalities represented, its workforce is truly international: almost 45% of residents and more than 70% of
the active population are well-integrated foreigners. The Greater Region represents a natural extension of
Luxembourg’s domestic market and also provides a solid workforce for Luxembourg’s business: Around 160,000 of
Luxembourg’s workforces commute from neighbouring countries France,Germany and Belgium to Luxembourg
on a daily basis, contributing to the skill-set available in Luxembourg. Many people in Luxembourg speak 3 or 4
languages (Luxembourgish, German, French, English, Portuguese, Italian, Spanish, etc.). This, combined with the
high level of professional qualifications held by staff, has allowed Luxembourg to respond to the requirements of
multilingual and multicultural investors.
Commitment to Europe
Luxembourg is also well known for its role within the European Union.As a founding member of major international
organisations such as BENELUX, the Council of Europe, the European Union, NATO, OECD and the United Nations,
Luxembourg has influence that belies its size,especially within Europe.It is host to many European Union institutions
amongst which are departments of the Commission, the Council and the Parliament, the Investment Bank, the
Court of Justice, the Court of Auditors and the Statistical Office.
High quality living standards
Luxembourg has one of the world’s highest per capita gross domestic products (source: IMF) and is one of the
top ranking countries in terms of Human Development,Quality of Life,Personal Safety and Corruption Perceptions
indices (source: UNDP, OECD Better Life Index,Transparency International 2013 study).
3. Private Equity in Luxembourg
… has a long tradition:
Luxembourg has set an ambitious agenda to attract Private Equity houses to provide more middle-office related
services from Luxembourg, in particular with regard to increasing substance requirements and AIFMD-related
regulatory standards.
Out of the 10 largest Private Equity houses worldwide,9 are doing business out of Luxembourg.Most have started
by leveraging the advantages that Luxembourg holding companies provide when structuring Private Equity
acquisitions. But business interests have since driven more substance to Luxembourg. This originally discrete
business with little local presence in Luxembourg has fundamentally changed as Private Equity houses have
been enhancing their presence in Luxembourg by establishing or ramping up operations and other capabilities.
A clear trend toward enhanced transparency and regulation drove Luxembourg to respond by introducing
the regulated private equity and venture capital vehicle SICAR in 2004 and the SIF in 2007 which, in retrospect,
anticipated many of the legal requirements that were introduced in the Alternative Investment Fund Managers
Directive (“AIFMD”) in July 2013.
Combining flexibility in legal and tax structuring, a reputable and stable financial environment and efficient
infrastructure has brought hundreds of Private Equity participants, both established and emerging, to set up
some or all of their Private Equity structures in Luxembourg.

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3.1. Background and historic evolution
Luxembourg has been used for many years for the structuring of international acquisitions via unregulated vehicles
such as SOPARFIs,building on the infrastructure,expertise and knowledge that Luxembourg has developed in the
retail funds industry over the past 30 years and combining this with a favourable environment for Private Equity.
Today Luxembourg is the domicile of approximately 50,000 registered holding companies of which a considerable
number is used to structure Private Equity acquisitions.
SICARs were created upon an industry initiative specifically designed to meet the needs of Private Equity and
Venture Capital actors; SICARS are lightly regulated, offering flexibilities on the structuring of its constitutive
documents and operations.
For the regulated SICAR and SIF,which will be described in further detail in section 5.1.,the following are the most
recent figures,as published by the Luxembourg supervisory authority of the financial sector,the CSSF (Commission
de Surveillance du Secteur Financier):
ÎÎ SICAR:
• The number of authorized SICARs was at 279 at the end of year 2013
• In 2013, out of the 279 SICARs, 237 were investing in Private Equity, 114 in Venture Capital, 9 in Mezzanine
and 3 in Private to Public projects (multiple nominations possible)
• From a sector perspective, 180 SICARs were Multi-Sector, 41 invested in Opportunistic Real Estate, 38 in the
Services Industry, 31 in Technology Firms, 20 in Energy, 17 in public-to private projects, 13 in Industry, and
another 23 in other sectors
• As regards the initiator origin, the largest share of SICARs was attributed to French initiators (19%), followed
by Swiss, German and Luxembourgish initiators. The largest number of non-European SICARs was set up
by US-based Private Equity houses with 7%. 36% came from other European and non-European countries.
• Assets under management of these SICARs were approx. € 32.3 bn.

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Players on the Luxembourg Private Equity scene
• GPs / Private Equity houses or their subsidiaries:
Whilst historically local presence was limited mostly to smaller and/or emerging GPs, many large international
houses have set up and conduct business out of Luxembourg since the middle of the last decade with a
considerable and growing local substance.
• Private Equity administrators:
These service providers offer domiciliary, accounting, trust services and, since the introduction of AIFMD in 2013,
depositary services for closed-ended funds investing in Private Equity and Venture Capital. They provide offices
to conduct business from, as well as a range of additional services to Private Equity houses that are conducting
business out of Luxembourg. Luxembourg is home to both Private Equity centric or specialized administrators
Equity as well as many more generalist administrators that are often part of larger financial services groups.
Governance standards of Private Equity structures set-up in Luxembourg have undergone a significant evolution
with enhanced governance having been made a priority by the supervisory authority and industry stakeholders
themselves. Today, there is a high number of skilled independent directors available to serve Private Equity
structures.
• Industry associations:
In the light of the above evolution, the Luxembourg Private Equity and Venture Capital Association (LPEA) was
established in 2010 and counts over 120 member organizations, of which 50 were GPs as of November 2014.
ÎÎ SIF:
• By the end of 2013, there were 1,562 SIF registered with € 306.5 bn assets under management
• Contrary to SICARs, SIFs may, in principle, be used for any type of investment in transferable values. As
of December 2013, 21 SIFs invested € 0.94 bn in high-risk assets, the terminology used for SICARs, 111 SIFs
invested € 10.87 bn in any non-listed assets
• SIFs accommodate a considerable number of vehicles investing in clean technologies, infrastructures
and tangible assets such as art, wine, jewellery and similar assets.
Source: CSSF Annual Report 2013

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3.2. Typical Luxembourg Private Equity structures
SICARs, SIFs and SOPARFIs can accommodate any set of legal, tax and governance requirements - both from
the investors’ as well as the General Partners’ perspective - that typically arise in the context of setting up
Private Equity structures at any level of an investment situation (phase/scope/industry focus) as well as in special
situations (e.g. master-feeder structures, acquisition structures etc.).
The table below compares the 3 most commonly used available structures on key criteria when choosing the
right form for a Private Equity vehicle.
Besides the existing S.C.S.,the AIFMD Law introduced a new legal form,the“Special Limited Partnership”(“S.C.Sp.”,
in French the “Société en Commandite Speciale”) a limited partnership without legal personality.This legal form
provides for a modernized legal framework for the organization of the GP-LP relationship. It is comparable to the
common law Limited Partnership and can be set up under a specific regulatory wrapper regime such as the
SICAR or SIF regimes, or without.As of mid-2014, around 200 S.C.Sp. had already been created.
Flexibility Diversification
ÎÎ SIFs are eligible for all asset classes
ÎÎ SICARs are exclusively eligible for risk capital
investments
ÎÎ SIFs must invest in a diversified asset portfolio (unless
set-up as a feeder)
ÎÎ SICARs are not subject to diversification requirements
ÎÎ SOPARFIs have no constraints in terms of investment
policy
Structuring Regulation
ÎÎ SICAR, SIFs and SOPARFIs are suitable for a large
variety of institutional and professional investor types
ÎÎ SICARs, SIFs and SOPARFIs may in principle be
organised in a fiscally neutral manner
ÎÎ SIFs, SICARs and SOPARFIs may benefit from some or
all of Luxembourg’s double tax treaty network
ÎÎ SICARs, SIFs and SOPARFIs can be organised as
limited partnerships
ÎÎ SIFs, SICARs and SOPARFIs may be organised using
different corporate forms (private limited liability
company form, public limited liability company,
corporate partnership limited by shares, etc.)
ÎÎ SICARs and SIFs are subject to prudential authorisation
and ongoing prudential supervision
ÎÎ SICARs and SIFs are subject to certain minimum
disclosure obligations
ÎÎ SOPARFIs are not subject to regulation
Our international investors appreciate the stable and reliable regulatory and fiscal environment offered and
sustained by Luxembourg authorities.
Diana Meyel, Partner, Cipio Partners GmbH

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3.3. General Partners/Management
When setting-up a corporate partnership limited by shares (“Société en Commandite par Actions”or“S.C.A.”) or
a common limited partnership (“Société en Commandite Simple”or“S.C.S.”),the general partner is typically set-
up as a Luxembourg limited liability company.The management of the S.C.A.or S.C.S.can solely be entrusted to
a general partner, or to one or several managers.
The general partner will always be personally liable for the partnership’s debts and obligations which cannot be
satisfied out of the partnership’s assets. In order to contain this joint and several liability, the general partner will
typically (though not always) be organised as a private limited liability company (“S.à r.l.”) or a public limited
liability company (“S.A.”). SICARs and SIFs may, however, also be set up in the form of an S.A. or S.à r.l..
The general partner may delegate some of its powers to agents that it may in principle freely determine. For
example,the general partner may or may have to nominate an AIF Manager,an investment advisor as well as all
service providers in Luxembourg (e.g.central administration and depositary).It may furthermore organise various
forums or committees to assist it in various functions.All such delegations and functions need to be organised in
such a manner so as to contain the joint and several liability with the general partner only.
3.4. Middle Offices
The growing presence of Private Equity business has prompted both general partners and the services industry to
develop middle office activities locally.A significant number of Private Equity houses have created considerable
proprietary infrastructure in Luxembourg.
Middle office services are focused on compliance, risk management and corporate governance and are used
to dealing with highly complex structures, financial instruments and the active participation in the ultimate
investee companies held by the entities organized and operated in Luxembourg.
The AIFMD and its implementing Regulations (Level 2) impose new requirements on managers of (or self-
managed) SIFs, SICARs and unregulated vehicles captured by the AIFMD on the necessity inter alia to retain
eligible conducting officers, the enhancement of the central administration and substance of the PE structure,
the necessity to introduce rules or policies on risk management, compliance, internal audit, transparency,
remuneration and conflict of interest situations. The AIFMD Law, the Level 2 measures and CSSF Circular Letters
detail the level of functions that may be outsourced and if so, to which degree.
3.5. Back Offices
Please refer to section 9. for a further description of back office and administrative functions.
Although we were already active in Private Equity as a listed company for several years when the SICAR regime
was introduced, we immediately recognised the genuine flexibility and efficiency offered by this new legal structure
and adopted it to house all our Private Equity activities.
Bruno Lambert, BIP Investment Partners
A growing number of Private Equity houses
have created considerable proprietary infrastructure
in Luxembourg.

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L U X E M B O U R G P R I VAT E E Q U I T Y & CA P I TA L V E N T U R E A S S O C I AT I O N
4.The Luxembourg Tax Environment
One of the key factors in favour of Private Equity operations in Luxembourg remains its
favourable tax environment. A stable tax framework, a highly competitive social security
system (for companies, employers and employees) and the lowest VAT rate in Europe greatly
contribute to making Luxembourg one of Europe’s most attractive jurisdictions for Private
Equity operations and investments.Of key importance remains,however,the double tax treaty
network that Luxembourg has built up over many years.
Taxes in Luxembourg at a glance:
ÎÎ Attractive effective tax rates
ÎÎ Broad participation exemption regime
ÎÎ Significant exemptions from withholding tax on
dividends
ÎÎ No withholding tax on non-profit linked interest,
royalties and liquidation proceeds (in principle)
ÎÎ No capital / stamp duties on the sale of shares in a
Luxembourg company
ÎÎ Use of international exchange of information
standards
ÎÎ Extensive double tax treaty network
ÎÎ Transfer pricing and thin capitalization adhering to
international standards
ÎÎ Advance tax clearance system
ÎÎ Specific tax regimes for investment funds,
securitization activities, IP rights management
activities, risk capital and reinsurance
ÎÎ Competitive personal income tax regime and low
social security contributions for employers and
employees
Luxembourg’s Double Tax Treaty Network
Luxembourg has bilateral tax treaties with all EU
Member States (except Cyprus) and with a number
of other countries (including almost all OECD Member
States). This network of tax treaties is constantly being
expanded.
SICARs and SOPARFIs, as Luxembourg taxable
companies, are entitled to treaty benefits and
therefore benefit from double tax treaties concluded
between Luxembourg and third countries.
The application of tax treaties to SIFs in a corporate
form is to be assessed on a case-by-case basis
depending on the wording of the treaty provisions
and their interpretation by the relevant foreign
authorities. Fiscally transparent SIFs may generally not
themselves benefit from treaty provisions due to their
tax transparency.
Specific Taxation of Luxembourg PE vehicles
The Luxembourg tax environment is extremely
beneficial for Private Equity structures, both regulated
and unregulated.
• The SOPARFI:
As a special purpose corporate vehicle subject to normal corporate taxation and not subject to a specific
regulatory regime, the SOPARFI benefits from Luxembourg’s extensive network of double-taxation treaties and
from the EU Parent-Subsidiary Directive.Despite being a fully taxable company,the SOPARFI allows for tailor-made
structuring providing, under certain conditions, for a full exemption of income and gains upon exit.
• The SICAR:
SICARs can be created using different corporate forms.
ÎÎ SICARs in the form of a limited partnership (S.C.S):
The SICAR, organised in the form of an S.C.S., is tax transparent and thus is not subject to corporate, municipal
business and net wealth tax. Income and gains received or realised are thus not subject to tax in the hands of
the SICAR. Income and gains may furthermore be paid to investors without any Luxembourg source taxation.
ÎÎ SICARs in the form of a corporate partnership limited by shares (S.C.A):
The SICAR organised as an S.C.A. is a fully taxable company; income from transferable securities is however
exempt under specific conditions; the SICAR in the form of an S.C.A. will equally not be subject to municipal
business tax or net wealth tax. Dividend distributions will equally not be subject to taxation at source.
• The SIF:
SIFs, whether organised as a limited partnership or a corporate partnership limited by shares, are not subject to
any Luxembourg taxes on capital gains or income; the sole tax due is a subscription tax of 0.01% based on the
quarterly net asset value. SIFs in corporate form can moreover claim access to certain double tax treaties.
Following the vote on 5 November 2014 of the law amending inter alia the laws of 21 June 2005 implementing
the EU Savings Directive and certain agreements with associated or dependent territories and abolishing the
withholding tax in favour of an exchange of information system, a SIF in the form of an FCP will, with effect as
from 1 January 2015,participate in the exchange of information as to the payer and the recipient of interest and
payments of similar nature (please refer to section 4.1 – EU Savings Directive).

L u x e m b o u r g : D o u b l e Ta x Tr e a t y N e t wo r k
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01.Albania2
02.Andorra2
03.Argentina2
04.Armenia
05.Austria
06.Azerbaijan
07. Bahrain
08. Barbados
09. Belgium
10. Botswana2
11. Brazil
12. Brunei2
13. Bulgaria
14. Canada
15. China
16. Croatia2
17. Cyprus2
18. Czech Rep.
19. Denmark1
20. Egypt3
21. Estonia4
22. Finland
23. France
24. Germany
25. Georgia
26. Greece
27. Guernsey2
28. Hong Kong
29. Hungary4
30. Iceland
31. India
32. Indonesia
33. Ireland1
34. Israel
35. Isle of Man2
36. Italy1
37. Japan
38. Jersey2
39. Kazakhstan
40. Korea (South)
41. Kyrgyzstan2
42. Kuwait2
43. Laos
44. Latvia
45. Lebanon3
46. Liechtenstein
47. Lithuania1
48. Macedonia
49. Malaysia
50. Malta
51. Morocco
52. Mauritius1
53. Mexico
54. Moldavia
55. Monaco
56. Netherlands
ÎÎ Effective carried interest structuring
ÎÎ Extensive double tax treaty network
ÎÎ Easy access to tax authorities and availability of tax confirmations
ÎÎ Lowest VAT rate in the EU (15% currently, increasing to 17% from 2015), VAT exemption on management services
rendered to SIFs and SICARs and free trade zone for valuable goods
ÎÎ Competitive effective tax rates and low social security charges for individuals
Luxembourg: Double Tax Treaty Network
Highlights of Luxembourg Tax Framework for Private Equity:
65. Romania
66. Russia
67. San Marino
68. Saudi Arabia2
69. Senegal3
70. Seychelles
71. Singapore4
72. Slovak Republic
73. MacSlovenia1
74. South Africa
75. Spain
76. Sri Lanka
77. Sweden
78. Switzerland
79. Syria3
80.Taiwan2
81.Tajikistan
82.Thailand
83.Trinidad & Tobago
84.Tunisia1
85.Turkey
86. Ukraine2
87. United Arab Emirates
88. United Kingdom5
3. First treaty being negotiated.
4. Replacement treaty signed or initialled but not yet in force
5. Replacement treaty being negotiated.
1. Amendment signed and enacted but not yet in force.
2. New treaty signed or initialled or signed and enacted
but not yet in force.
57. New Zealand3
58. Norway
59. Oman2
60. Pakistan3
61. Panama
62. Poland
63. Portugal
64. Qatar
89. United States1
90. Uruguay2
91. Uzbekistan
92.Vietnam
4 . T h e L u x e m b o u r g Ta x E n v i r o n m e n t

15
4.1. Direct taxation of corporations
Luxembourg companies are subject to the
following taxes1
:
• Income taxes at a combined rate of 29.22%
in Luxembourg City in 2014, including
municipal business tax and a 7% surcharge
for the unemployment fund (a minimum flat
corporate income tax of €3,210, including the
7% unemployment fund surcharge, applies to
financing and holding companies)
• Annual net worth tax levied at a rate of 0.5% on
the company’s worldwide net worth on January
1, subject to certain adjustments (eg., qualifying
shareholdings)
Corporate income tax
Taxation for Luxembourg entities and permanent
establishments:
Corporate income tax applies to all tax resident
corporations and to Luxembourg permanent establishments of foreign corporations. Partnerships (e.g. general
corporate partnerships, common limited partnerships and other forms of companies listed under Article 175 of
the Luxembourg income tax act such as civil companies) are regarded as tax transparent for Luxembourg tax
purposes and are therefore not subject to corporate income tax. Income distributed by such entities will be
considered, from a Luxembourg tax point of view, as flowing through the entity and are thus allocated directly
to investors.
Resident taxpayers are liable to tax on their world-wide income, unless income is exempt under the provisions of
applicable tax treaties or specific domestic tax law.There is a possibility of obtaining tax credits for foreign taxes
paid.Non-resident taxpayers are liable to tax on their Luxembourg-sourced income only,e.g.income realized by
and allocable to a Luxembourg permanent establishment.
The thin capitalization rules generally require a debt/equity ratio of 85:15 in the context of financing of
participations or real estate. Following the example of other European countries, the Luxembourg direct tax
authorities have clarified the tax treatment of Luxembourg group financing companies. Besides appropriate
organizational substance, the relevant guidance provides that the equity of the financing company should be
sufficient for the functions it performs, the assets used and the risks it assumes. Minimum equity should be at least
1% of the amounts lent with a maximum of € 2 million. In addition this equity should effectively be at risk.
No CFC rules apply in Luxembourg.
Capital gains taxation for non-residents
Ifanon-residentshareholderisresident(fortaxpurposes)inacountrythathasadoubletaxtreatywithLuxembourg,
the treaty will generally allocate the right to tax to the country of residence of the relevant shareholder. In the
event that no such double tax treaty exists or can be applied,capital gains on the sale of shares in a Luxembourg
company are subject to tax in Luxembourg only if the non-resident shareholder has held a substantial interest in
the Luxembourg company and the transfer occurs within 6 months after the acquisition (i.e.thereby representing
a speculative gain) or in the event of a transfer after 6 months or more,the non-resident shareholder has been a
Luxembourg resident taxpayer for more than 15 years and has become a non-Luxembourg taxpayer less than 5
years before the alienation takes place. For this purpose,a substantial interest exists if a shareholder,either alone
or together with certain close relatives,has held a shareholding of more than 10% in a Luxembourg company at
any time during the five year period preceding the transfer.
For non-resident corporations,corporate tax will be levied at a rate of 22.47% (for 2014) on any income allocated
to a Luxembourg permanent establishment.
1
All figures are applicable as of the time of publication.

16
Municipal business tax
Municipal business tax varies from 6% to 12% (levied on income of businesses operating in Luxembourg),
depending on the municipality where companies have their registered office. For companies operating in the
city of Luxembourg, the rate is 6.75%. A deduction of € 17,500 applies to the municipal business tax base for
entities liable to corporate income tax (€ 40,000 for other businesses). Municipal business tax is cumulative with
corporate tax and is non-deductible.
Net wealth tax
The net wealth tax is levied at a rate of 0.5% on the company’s worldwide net worth on 1 January of each
year. Inter alia qualifying IP and shareholdings under the participation exemption regime net of allocable debt
(allocable debt that exceeds the value of the shareholding is deductible against other assets) are excluded
from the taxable base. Luxembourg corporate income tax is creditable to the net worth tax provided certain
conditions are met. Luxembourg real estate is valued on a certain unitary value for net wealth tax purposes
which is only a fraction of the current market value (generally less than 10% of the actual value).
Withholding taxes
A withholding tax of 15% is levied on dividend payments (17.65% if the dividend tax is not charged to the
shareholder) unless an applicable tax treaty provides for a lower rate or the Luxembourg participation exemption
regime reduces withholding tax to 0%.Liquidation proceeds are not subject to withholding tax.Arm’s length fixed
or floating rate interest payments are generally not subject to withholding tax unless the EU Savings Directive
applies. The withholding tax applicable under the EU Savings Directive will no longer apply with effect from 1
January 2015. Interest paid on certain profit sharing bonds and profit sharing interest paid on loans is subject
to 15% withholding tax unless a lower tax treaty rate applies. Royalty payments are not subject to withholding
tax provided they are not connected with non-resident artists’ performances and sportsmen’s activities in
Luxembourg.
Tax Law on Intellectual Property (“IP”)
Luxembourg’s IP Tax Law provides for an 80% tax exemption of income derived from intellectual property as well
as capital gains realized on the disposal of such intellectual property. Only 20% from the net income out of IP
rights will be taxed at 29.22% which provides an effective tax burden of roughly 5.8%.Qualifying IP assets held by
Luxembourg companies are also exempt from net wealth tax of 0.5%.
The aim of the IP Tax Law is to encourage companies to invest more in research and development activities.
Conditions that need to be fulfilled:
• The IP must have been created or acquired after 31 December 2007
• The expenses in connection with the IP must be recorded as an asset in the balance sheet for the first
accounting year for which the application of the regime is applied for
• The IP may not have been acquired from a person who qualifies as an “affiliated company”, however, the
definition of an affiliated company is limited to direct shareholder relationships, or sister companies with the
same direct shareholder.
EU Savings Directive
On 1 July 2005 Luxembourg introduced a withholding tax of initially 15% on interest paid through a Luxembourg
paying agent (usually a bank) to an individual or residual entity (within the meaning of Article 4 (2) of the
Luxembourg Law of 21 June 2005 transposing the EU Savings Directive into Luxembourg law; in general, residual
entities are entities other than legal entities, entities taxed as legal entities and UCITS) resident of or established
in the EU or one of the dependent or associated territories that have agreed to adopt similar measures to those
provided for under the EU Savings Directive.The final withholding tax rate is 35% since 1 July 2011.No withholding
tax will be due in the event that the beneficial owner consents to the exchange of information.
Luxembourg corporate income tax
is creditable to the net worth tax provided certain conditions are met.

17
A draft law has been deposited which proposes that with effect from 1 January 2015, the withholding tax will be
replaced by a system of exchange of information regarding the payer and recipient of the interest between the
tax authorities of Luxembourg and the territory of residence of the recipient.
Value Added Tax (“VAT”)
The Luxembourg VAT standard rate of 15% (which is going to be increased to 17% from 1 January 2015) is
the lowest in the EU, compared with an average of 21% in the other EU Member states. The Luxembourg VAT
regime furthermore exempts management services provided to investments funds from VAT. Since July 2013,
the exemption is available for all alternative investment funds covered by the law of 12 July 2013 transposing
the AIFMD, including unregulated funds. This exemption is applicable on portfolio management services,
administrative services and most services of depositary banks. Due to this exemption and the low VAT rate, the
VAT burden of SICAR, SIF, and other alternative investment funds is very limited. This exemption is however not
available to SOPARFIs unless they qualify as AIF.
Assuming their activity is limited to the ownership of shares, SOPARFIs are not obliged to register for VAT except in
the unlikely case they acquire goods from abroad.They cannot recover the VAT incurred on their costs.
Luxembourg has no“use and enjoyment”rule obliging,as in some Member States,holding companies,which are
not VAT taxable persons, to self-assess the local VAT on services received from non EU service providers without
allowing the deduction of this VAT.
A Freeport, operational since September 2014, in the vicinity of Luxembourg airport, benefits from the VAT-free
zone regime on transactions in valuable goods, including their storage. Certain types of investment funds (i.e.,
passion funds, investing into art and other collectibles) may take advantage of the Freeport.
Registration duty and transfer taxes
A fixed registration duty of € 75 is due upon incorporation and modification of the articles of association of a
Luxembourg company or upon transfer of the statutory seat or place of central administration of a company to
Luxembourg.
Transfer taxes on the sale of local real estate amount to 7% or 10%.
Tax treatment of carried interest
In the law transposing the AIFM directive,a regime for the taxation of carried interest from AIFs was also introduced.
The share of profits derived from an AIF and paid to AIFM employees is treated as ordinary income and thus
subject to the highest marginal rate of tax for the recipient (43.6% for 2014) on global income. However if the
employee satisfies certain conditions,the carried interest would be taxable at one quarter of the global tax rate.
The conditions to be fulfilled are:
1. The recipient was not resident in Luxembourg, nor subject to Luxembourg tax on his/her professional income
during the 5 preceding years
2. The recipient becomes Luxembourg tax resident
3. No advance payment were received by the recipient
4. The entitlement to carried interest is conditional on the investors having priority in recovering their initial
investment
The individual can benefit from this tax treatment for up to 10 years after having started his/her professional
activity in Luxembourg.
The beneficial tax rates do not apply to capital gains realised on the sale of interests in the AIF,which are subject
to standard capital gains rules.
Non-resident taxpayers are only subject to income
tax on Luxembourg-sourced income.

18
Implications of OECD BEPS project
In February 2013, the Organization for Economic Development (OECD) issued a report entitled “Addressing Base
Erosion and Profit Shifting” (BEPS), followed by an action plan with 15 actions in July 2013 (Action Plan). The
BEPS project is supported by the G20 and is not limited to OECD member countries only, but also includes a
number of developing countries.The Action Plan is intended to prevent taxpayers operating internationally from
shifting profits to low- or no-tax jurisdictions and thereby reducing their tax base. The OECD released some of
the recommendations under the Action Plan in September 2014, but the majority of policy recommendations
will only be finalized by the end of 2015. While BEPS was not aimed at the fund sector, many of the actions
and recommendations will likely have an impact on Private Equity and Venture Capital funds and/or their
portfolio companies. Already published OECD recommendations include rules to deal with hybrid instruments
and entities, a review of harmful tax practices of Member States and associated countries, a framework for
mandatory spontaneous information exchange on tax rulings covering certain regimes, rules against treaty
abuse as well as an update of transfer pricing rules for intangibles assets. In addition, groups would be required
to draw up a “country-by-country-report” that is to be made available to tax authorities and should allow tax
authorities to get a more global view on a group’s worldwide operations, also functioning as a risk-assessment
tool.The actions that the OECD is still working on include rules regarding interest deductions and transfer pricing
rules for “high-risk transactions”, which includes the treatment of management fees.
So far, most recommendations are still in draft form and there is currently no obligation for OECD Member States
to implement them. Nevertheless, many countries have started to consider or already implement some of the
solutions suggested by the OECD. As a result, the international tax environment is changing more rapidly even
than in the past.It will therefore be important to regularly review existing structures to ensure they are not affected
by tax law changes implemented as a result of the BEPS project.
4.2. Miscellaneous charges or fees
Chamber of Commerce Fee
All Luxembourg commercial companies are subject to an annual contribution (cotisation) ranging from 0.02%
to 0.025% based on the relevant taxpayer’s profit generated in the penultimate fiscal year before the relevant
contribution generating year. This contribution is capped at €3,000 for SOPARFIs, however the company in
question must be coded with the correct NACE code in order to benefit from this cap.
CSSF Fees
Prudential oversight comes at a cost to the entities supervised:
Authorisation: €3,500 for single-compartment structures and €7,000 for multi-compartment structures
Annual fee: for single-compartment structures €3,000.In case of SIFs,for multi-compartment structures the charge
varies according to the number of compartments:
1-5 compartments: €6,000
More than 50 compartments: €30,000
The annual fee for SICARs is fixed at €3,000 (single-compartment) and €6,000 (multi-compartment).

19
4.3. Personal income taxation
Luxembourg is one of the EU Member States with the lowest effective taxes and social security charges
for individuals.
Social security
Social security contributions are computed on the annual gross remuneration capped at €115,261.Self-employed
persons are subject to a 23.2% rate on their gross professional income capped at also €115,261.
In addition, employees and self-employed persons are subject to a 1.4% dependency contribution (assurance
dépendance) assessed on their annual gross professional income (uncapped). This dependency contribution
applies to all income (and not only to employment or self-employed income) in the hands of taxpayers who are
subject to the Luxembourg mandatory State social security regime.
Income tax
Resident taxpayers are subject to income tax on their worldwide income. Non-resident taxpayers are only
subject to income tax on Luxembourg-sourced income.Taxable income is assessed on the basis of total income
less exemptions, deductible expenses and allowances. The law provides for many exemptions and deductions
especially for families with children. Income tax is progressive with rates between 0% and a maximum 40%
and is assessed on the basis of the taxpayers’ family status. This tax rate is itself increased by an employment
fund contribution of 7% or 9% (depending on the family status and level of income) resulting in a top marginal
rate of 43.60%. An additional 0.8% temporary financial crisis contribution is levied against persons affiliated to
Luxembourg social security.
In principle personal tax is assessed on the basis of an annual tax return that must be lodged by taxpayers. A
withholding tax is levied on employment income (progressive withholding tax scale) and director’s fees (20%
flat withholding). Withholding taxes on employment income and director’s fees are creditable against the
taxpayer’s final income tax liability.
A special regime for highly skilled workers (“HSWs”),who are seconded to a Luxembourg undertaking belonging
to an international group or are recruited from abroad by a Luxembourg undertaking, is applicable since
1 January 2011. This special regime consists - subject to certain conditions – of an exemption from Luxembourg
personal income tax on certain expenses and allowances paid to or on behalf of HSWs due to their expatriation.
However these expenses and allowances remain tax deductible costs for the Luxembourg undertaking.
Net wealth tax
There is no net wealth tax for individuals.
Inheritance/Gift tax
Inheritance tax is due on the value of all property inherited from a Luxembourg resident whereas transfer tax is
due on the value of real property located in Luxembourg that is inherited from a non-resident.
Where the heir is a direct descendant or a spouse with children, there is in principle no inheritance tax liability.
Gift tax rates vary according to the degree of kinship between the donor and the donee, ranging from 1.8% to
14.4%.
Mangrove’s activity, both on the investor as well as the portfolio level, is highly international. Luxembourg is
all set to provide the instruments you need to set up international investment projects – since the home market
is small, everything is geared to accommodate the legal, fiscal and regulatory requirements to invest both in
Europe and overseas.
Concerning fund formation and management you can achieve all you need towards your investors here in
Luxembourg and there are no structural disadvantages. In addition the Government is keen to diversify the
economy and open for exchange with GPs.
Hans-Jürgen Schmitz, Mangrove Capital Partners

5 . P r i va t e E q u i t y – L e g a l F r a m e wo r k
20
5. Private Equity – Legal Framework
Private Equity vehicles in Luxembourg are either non-regulated companies or structures
that are supervised by the Luxembourg Commission de Surveillance du Secteur Financier
(“CSSF”).
The CSSF regulates SICARs and SIFs.SIFs are regulated under the provisions of the law dated 13 February 2007 on
the specialized investment funds (the“SIF Law”) while SICARs are regulated under the provisions of the amended
law of 15 June 2004 (the“SICAR Law”).Both SICARs and SIFs are registered on official lists maintained by the CSSF..
The CSSF also regulates accessory services, such as:
• Registrar agents
• Depositaries
• Professionals providing fund transfer services
• Company domiciliation agents
• Client communication agents
• Administrative agents of the financial services industry
• IT systems operators of the financial services industry
• Professionals providing company management services
• Auditors
As of 15 September 2014,323 entities with Professional of the Financial Services (“PSF”) status were registered with
the CSSF employing 15,100 persons.
5.1.Luxembourg Private Equity unregulated and regulated structures
Unregulated structures
The most common non-regulated Private Equity structure in Luxembourg is the SOPARFI. SOPARFIs are in fact
ordinary commercial companies which are governed by the amended Luxembourg law of 10 August 1915 on
commercial companies (the “1915 Law”) and by the amended law of 20 December 2002 on annual accounts
(the “2002 Law”).
As an ordinary company subject to the 1915 Law the SOPARFI is not subject to any risk-spreading requirements
and may in principle invest in any asset class. SOPARFIs are used to invest and manage financial participations
in Luxembourg or foreign companies. SOPARFIs can also undertake commercial activities which are directly or
indirectly connected to the management of their holdings including the debt servicing of their acquisitions.
Regulated structures
Amidst an international regulatory environment seeking to increase transparency and oversight the SICAR
and the SIF are Luxembourg’s two tried-and-tested regulated Private Equity frameworks. The legal framework
applicable to SICARs and SIFs offers a combination of a flexible and accessible regulatory infrastructure with
strong investor protection features. The CSSF oversees both vehicles. They can only be subscribed to by “well-
informed” investors (see the Glossary for a more detailed definition).
SICAR:
SICARs are investment vehicles designed specifically to suit the needs of Private Equity and Venture Capital.
SICARs allow direct or indirect contributions of assets to be made to entities in view of their launch,development
or listing on a stock exchange. In excess of 280 SICARs have been launched since inception in 2004.
SIF:
SIFs were created to replace a predecessor regime which was no longer suitable.In particular,with Luxembourg
starting to position itself as an alternative funds domicile, the time was ripe for a complete overhaul of the then
existing legal and regulatory framework. The SIF regime was thus created in 2007 in order to clearly establish
Luxembourg as an AIF domicile further accommodating all alternative asset classes and hedge funds, real
estate funds and private equity funds in particular.

21
5.2. Important aspects of Luxembourg Private Equity vehicles
SIF (regulated) SICAR (regulated) SOPARFI (unregulated)
Regulation
light
Regulation
none
Choice of Corporate Form
Corporate form
ÎÎ Public limited company (S.A.)
ÎÎ Private limited company (S.à r.l.)
ÎÎ Corporate partnership limited by shares
(S.C.A.)
ÎÎ Common limited partnership (S.C.S.)
ÎÎ Special limited partnership (S.C.Sp.)
Contractual form
ÎÎ Unit Trust (FCP)
Corporate form
ÎÎ Public limited company (S.A.)
ÎÎ Private limited company (S.à r.l.)
ÎÎ Corporate partnership limited by shares (S.C.A.)
Tax Treatment
Transparent:
ÎÎ Unit Trust (FCP)
Not transparent
(taxable vehicle in Luxembourg):
ÎÎ All corporate forms (see above)
Tax Treatment
Transparent:
Not transparent (taxable vehicle in Luxembourg):
ÎÎ Public limited liability company (S.A.)
ÎÎ Private limited liability company (S.à r.l.)
ÎÎ Corporate partnership limited by shares (S.C.A.)
Duration
Unlimited or limited period of time
Form of securities
ÎÎ Shares1
: ordinary, preference, beneficiary
ÎÎ Partnership interest (for S.C.S. and S.C.Sp.)
ÎÎ Redeemable
ÎÎ Voting and non-voting
ÎÎ Founder and ordinary shares
ÎÎ Bonds and/or notes
Listing
Possible (only for FCP, S.A. and S.C.A.)
Redemption
Possible but not mandatory
Capital calls / Distributions
Capital calls and distributions to investors are subject solely to the rules provided for in the
constitutive documents
Flexibility on issue price (except where NAV calculation in specific cases)
Preferential rights may be limited or cancelled
Capital calls / Distributions
Capital calls and distributions
to investors are subject to the
rules provided in the constitutive
documents
Flexibility on issue price
Preferential rights may be limited
or cancelled
Permissible asset classes
Any kind of asset class
Restricted asset classes
Investment in risk capital
(broad definition of “risk capital”)
Permissible assets
Any kind of assets
Risk spreading
Risk diversification requirement
Risk spreading
No risk diversification requirement
1
Where shares are issued in bearer form, the law requires them to be deposited with an eligible depositary.

22
Compartments
Possible
Compartments
Not possible
Capital
ÎÎ Fixed or variable
ÎÎ € or foreign currency equivalent
ÎÎ Minimum of €1,250,000 (including share
premium), to be reached within 12 months
of authorisation provided at incorporation
ÎÎ Minimum of €12,500 for S.à r.l. and
€31,000 for S.A. / S.C.A.
ÎÎ Partly paid shares must be paid up to at
least 5%
ÎÎ No restriction for S.C.S. / S.C.Sp.
ÎÎ Contribution in kind and/or in cash
permissible
ÎÎ Commitment or subscription based model
Capital
ÎÎ Fixed or variable
ÎÎ Minimum of €1,000,000 (including
share premium) to be reached within
12 months of authorisation, provided
at incorporation
ÎÎ Minimum of €12,500 for S.à r.l. and
€31,000 for S.A. / S.C.A.
ÎÎ Shares must be paid up to at least 5%
ÎÎ No restriction for S.C.S. or S.C.Sp.
permissible
ÎÎ Commitment or subscription based
model
Capital
ÎÎ Fixed
ÎÎ Minimum of €12,500 for S.à r.l.
and €31,000 for S.A./ S.C.A. at
incorporation only
ÎÎ Shares must be paid up to 25% for
S.A./ S.C.A. and 100% for S.à r.l.
ÎÎ No restriction for S.C.S. or S.C.Sp.
permissible
ÎÎ Commitment or subscription based
model
Management bodies
ÎÎ Board of directors, manager(s) or managing general partner – dependent on corporate form
ÎÎ Approval of board members by the CSSF
ÎÎ No nationality/residency requirement
Management bodies
ÎÎ Board of directors, manager(s)
or managing general partner –
dependent on corporate form
ÎÎ No approval requirements for
board members by the CSSF
ÎÎ No nationality/residency
Supervisory reporting
ÎÎ Monthly reporting
ÎÎ Annual audited report due 6 months after
year end.
ÎÎ Semi-annual reporting
ÎÎ Annual audited report due 6 months
after year end.
Not applicable
Filing requirements with trade
register
Within 7 months after year end, audited
annual accounts and appendix have to be
filed.
Filing requirements with trade
register
Within 7 months after year end,
audited annual accounts have to be
filed.
Filing requirements with
trade register
Within 7 months after year end,
annual accounts have to be
filed.
Depositary
Luxembourg depositary required
Depositary
Not required
Administrator
Central administrator to be appointed unless own infrastructure
Administrator
Domiciliation agent unless own
Luxembourg infrastructure
Auditor
Independent approved Luxembourg auditor required
Auditor
Independent Luxembourg auditor
in certain circumstances only

23
5.3. Structuring by means
of Luxembourg Vehicles
The following examples illustrate how PE investments
could be structured via of a variety of Luxembourg
vehicles, including options to locate PE funds
themselves in Luxembourg.
Luxembourg structures typically consist of either a
SOPARFI, SICAR or SIF or of a combination of the latter
two with one or more SOPARFIs.
In the case of an FCP-SIF S.C.S. and S.C.Sp. qualifying
as a tax transparent structure the use of intermediate
companies is usually recommended to benefit
from double tax treaties and EU directives that only
companies can benefit from, unlike an FCP.
Investors can invest either directly into the Luxembourg
vehicle or indirectly via an additional Luxembourg-
based or non-Luxembourg-based feeder vehicle.
The legal framework applicable to SICARs and SIFs
offers a combination of a flexible and accessible regulatory infrastructure
with strong investor protection features.

24
The following charts are examples of typical Luxembourg Private Equity structures:
Direct investment or via a Luxembourg or non-Luxembourg based feeder vehicle into a Luxembourg SOPARFI:
the SOPARFI, possibly via a second SOPARFI, invests into a local target company.
ÎÎExample 2: investment via Luxembourg an S.C.Sp. and a SOPARFI to benefit from double-tax-treaties and
the EU Parent-Subsidiary Directive.
ÎÎExample 1: traditional investment via a Luxembourg SOPARFI.The financing structure respects the thin
capitalization rule of 85:15 debt/equity ratio.

25
ÎÎExample 3: investment via Luxembourg S.C.Sp. and a SOPARFI, SICAR or SIF with a Luxembourg General
Partner. In case the SIF/SICAR is incorporated as an S.C.A., the General Partner will usually be set up as a limited
liability company. Management services to a SICAR/SIF are VAT exempt.
ÎÎExample 4: investment via foreign feeder entities into Luxembourg S.C.Sp. and several Luxembourg SOPARFIs.

26
5.4.Thematic funds
SICARs, SIFs and SOPARFIs are ideally suited for thematic funds. Into this category fall microfinance funds,
opportunistic real estate funds, infrastructure funds and impact finance funds. Most of these funds are usually
set up in the form of SIFs, while they could also be set up as SICARs, as long as they comply with the risk capital
requirement for their investments. This is usually the case for opportunistic real estate transactions, but also of
some microfinance funds that provide equity to microfinance institutions.
5.5.Sharia compliant structures
Luxembourg offers a large platform of competencies and service capabilities for the Sharia compliant Private
Equity industry. Because of the natural fit between providing capital to enterprises and profit and loss principles
of Sharia, Private Equity has become well suited as an asset class for Islamic investors.
Mudarabah and Musharakah, Riba free and Gharar free financial transactions can easily be structured using
the SIF and SICAR vehicles.
Luxembourg - a history of innovation
in the European Islamic finance market
Luxembourg - a first mover
in the European Islamic Finance sector
1978: First islamic finance institution established in a western
country
1982: First life insurance company
1983: First Sharia compliant insurance company in Europe
2002: First European stock exchange to enter Sukuk market
2009: - Platform “Al Mi’yar”
- 1st CB from a Western country to join the Islamic
Financial Services Board (IFSB)
2010: - The Luxembourg Central Bank becomes a founding
member of the International Islamic Liquidity
Management Corporation
- Clarification of tax treatment of Islamic financial
arrangements and issuances
ÎÎ Luxembourg among the 5 leading Islamic Fund domiciles
ÎÎ First EU state to issue Sukuks
ÎÎ 45 Sharia compliant investment funds and sub-funds with
more than EUR 5 bn assets under management*
ÎÎ 16 Sukuk listed on the Luxembourg Stock Exchange
ÎÎ 1 Sharia compliant insurance company
ÎÎ Specialised teams and dedicated services for Sharia
compliant investment funds
ÎÎ Circular letters of the Luxembourg tax authorities
ÎÎ ALFI issued “Best Practice Guidelines for Islamic Funds”
*source: ALFI, CSSF, Zawya

27
6.Accounting Framework for Luxembourg PE Vehicles
6.1.Accounting Standards
With the exceptions of the unregulated S.C.S and S.C.Sp, which can elect any accounting framework, all
Luxembourg vehicles may choose adopting Luxembourg Generally Accepted Accounting Principles (“Lux
GAAP”) or International Financial Reporting Standards (“IFRS”). In addition, with the specific approval from the
local Accounting Standards Board a company may use any alternative internationally accepted accounting
framework such as US GAAP.
6.2.Valuation Rules
As a general rule, Luxembourg accounting rules have always been a primarily prudence-focused framework
permitting the booking of investments at cost less durable impairment with the recognition of only unrealized
losses and not unrealized gains in the profit and loss accounts of a company. In recent years, with the creation
of vehicles such as the SICAR and the SIF and harmonization derived from recent EU accounting directives,
the possibility of using Fair Value in the financial statements of Luxembourg companies has been introduced.
Depending upon the corporate structure and nature of a Private Equity Vehicle different valuation principles
are thus allowed.
Companies adopting IFRS as accounting framework have to apply valuation policies depending upon the type
of instruments being valued. Under Lux GAAP there is a certain level of additional flexibility and possible choices
as outlined in the table below:
Type of vehicle /
Regulatory framework
Valuation under Lux GAAP
Unregulated
S.C.S. and S.C.Sp.
The valuation rules to follow can be freely determined in partnership
agreement
Other unregulated
vehicle
Valuation rules are governed by the Law of 19 December 2002, as
amended.
There are two valuation options:
a) Acquisition cost/principal less any durable impairment
b) Fair Value.
The choice of which method to use rests with the management of the
company. As a general rule companies tend to adopt option a).
SICAR, SIF
SICARs are obliged to account their investments at Fair Value. SIFs are also
required to account investments at fair value unless their constitutional
documents specify otherwise. Generally the prospectus, Private Placement
Memorandum (“PPM”) or the Offering Memorandum (“OM”) will contain
more detailed explanations with regard to the valuation methodology.
The International Private Equity and Venture Capital (“IPEVC”) guidelines are typically used as a reference basis
for calculating the Fair Value of Private Equity type investments.

6 . A c c o u n t i n g F r a m e wo r k fo r L u x e m b o u r g P E Ve h i c l e s
28
6.3.Consolidation
6.3.1. Unregulated Vehicles
Principles: Luxembourg law requires that limited liability companies that control another company prepare and
publish consolidated financial statements.S.C.Sp.are not required to produce consolidated financial statements
and S.C.S.are required to apply Luxembourg law related to consolidation when limited partners are entities with
limited responsibilities. Consolidation is not required in the following cases:
ÎÎExemptions
1. Sub-group exemption: any parent company which is also a subsidiary undertaking of a parent undertaking
not governed by the law of a Member State of the European Community is exempted from the obligation
to draw up consolidated accounts and a consolidated annual report under certain conditions.
2. Threshold exemption: consolidation is not required for consolidated groups which do not exceed the
following metrics: balance sheet total: €17.5m / total turnover: €35m / total employees: 250. However,
the «threshold exemption» is not applicable in case the relevant company is listed on a regulated stock
exchange in the EU.
3. Financial Holding exemption: no consolidation is required if the parent company has not intervened in
the management of the subsidiary,has not exercised its voting rights in respect of the appointment of the
management within the current and the last 5 years, has not granted loans to the subsidiary and, if the
conditions were met, has received an exemption granted by the Luxembourg authorities.
4. Specific consolidation exemption for Private Equity: In December 2009, the Luxembourg Ministry
of Justice issued a Notice relating to the 1915 Law that allows companies not to present consolidated
financial statements in case six conditions are fulfilled:
a. The company is subject to the 1915 Law and is held by one or more well-informed investors
b. The company’s exclusive corporate object is to invest in risk capital, which is defined as direct or
indirect contribution of funds to one or several entities in view of their launch, development and their
listing on a stock exchange.These investments are held with the intention to sell them at a profit
c. An ex-ante exit strategy has been formally defined and documented in writing, communicated
to investors, and it is part of the investment policy, implying the intention to divest on a mid-term basis
(generally 3 to 8 years)
d. The company’s objective is to provide its investors with the benefit of the results of the management
of its investments in return for the risk which they incur
e. If the investments are not carried at Fair Value on the face of the balance sheet, the Fair Value is
disclosed in the notes to the financial statements
f. Any event, guarantee or uncertainty that might have a significant impact on the entity’s ability to
continue as a going concern, on its cash-flow situation, on its available liquidities or on its solvency has
to be disclosed adequately in the notes to the annual accounts.
We looked at different jurisdictions but soon realised that no other country could compete in offering an
environment that benefited the fund, our investors and portfolio companies so positively.
Guillermo Morales, Executive Chairman of GGM Capital

29
ÎÎExclusions
Specific investments may be excluded from the consolidation requirement if they meet one of five possible
exclusions as set out by the 1915 Law. These are: immateriality, severe restrictions, disproportionate costs,
temporary holdings or diverging activities.
However, in this case, the consolidated accounts will still have to be published in Luxembourg according to the
local requirements and the notes to the annual accounts of the exempted company must disclose the name
and registered office of the parent undertaking and the exemption from the obligation to draw up consolidated
accounts and a consolidated annual report.
ÎÎIFRS Exemption from Consolidation
Under IFRS 10, an entity is exempted to consolidate its subsidiaries if it qualifies as an investment entity. An
investment entity is defined as an entity that:
a.Obtains funds from one or more investors for the purpose of providing those investor(s) with investment
management services
b. Commits to its investor(s) that its business purpose is to invest funds solely for returns from capital
appreciation, investment income or both and
c. Measures and evaluates the performance of substantially all of its investments on a fair value basis.
An investment entity is however required to account its investment at fair value, through profit or loss.
6.3.2. Regulated Vehicles (SICARs and SIFs)
The SICAR and the SIF are specifically exempted from the consolidation requirement.
6.4.Profit Repatriation
Through the use of appropriate financial instruments and an adequate regulated or non regulated structure,the
tax charge levied on profit repatriation can be minimized both at investment level and investor level.
Distribution of dividends
Not subject to specific restrictions
except compliance with minimal capital
requirements and limitations provided
for in the articles of incorporation/
management regulations.
Not subject to specific restrictions
except compliance with minimal capital
requirements and limitations provided
for in the articles of incorporation.
For S.A., S.C.A. and S.à r.l. subject to
the requirements of the 1915 Law.
Withholding tax on distributions
Distributions, whether paid to
resident or non-resident investors,
are not subject to withholding tax in
Luxembourg. However, if formed as an
FCP, some payments may be subject
to withholding tax under the European
Savings Directive.
Distributions, whether paid to
resident or non-resident investors,
are not subject to withholding tax in
Luxembourg.
Except for specific situations, no
withholding tax should apply to
liquidation proceeds or interest
payments. Dividend payments are
subject to 15% withholding tax
(exemptions are available under
certain conditions).
Non residents capital gains taxation
Non-residents are not subject to tax in Luxembourg.

7 . T h e A l t e r n a t i v e I n v e s t m e n t F u n d M a n a g e r s D i r e c t i v e
30
7.The Alternative Investment Fund Managers Directive
On 11 November 2010 the European Parliament adopted the Alternative Investment Fund Managers Directive
(“AIFMD”). The AIFMD came into force in July 2011 and had to be implemented by 22 July 2013 in all European
Member States.
The AIFMD creates a regulatory framework that primarily affects managers of alternative investment funds, as
well as alternative investment funds (AIFs) including Private Equity funds based in the EU and, under specific
circumstances, managers and investment entities established outside the EU.
The AIFMD introduces amongst others a marketing passport (the“Passport”) permitting the offer or placement of
qualifying AIFs in all EU Member States without additional authorisation or registration requirements and which is
intended to fully replace, after a transitional period still in place for non-EU AIFM or non-EU AIFs, the fragmented
national private placement regimes currently existing within some EU Members States.
While many see AIFMD as a burden as it will indeed increase costs for managers, the Passport is equally seen
as an opportunity that will make AIFs and Private Equity in particular a more widely accessible and attractive
asset class. While the UCITS passport, introduced in 1988, revolutionized the European fund market and put
Luxembourg at the forefront,Luxembourg is now determined to provide the same opportunities to Private Equity
players under AIFMD.
Luxembourg is a unique place for Private Equity and provides Private Equity houses with advantages not only in
terms of political, economic and fiscal stability, infrastructure and manpower but also a legacy of more than 20
years of being the world’s second largest, mature and sophisticated fund domicile.
When the regulated Luxembourg Private Equity structures, the SICAR and the SIF, were introduced in 2004 and
2007 respectively, they displayed many of the features that became a standard feature under the AIFMD, i.e.
they already have the highest compatibility standard compared to other existing vehicles for Private Equity.Light
and pragmatic supervision, stringent custody requirements and sophisticated reporting represent recognised
standards in Luxembourg which service providers are familiar with. Last, but not least, the Passport represents
the ultimate benefit of the AIFMD, a concept Luxembourg is not only familiar with but for which Luxembourg is
recognized worldwide.
The introduction by the law of 12 July 2013 of the S.C.Sp. provides for an attractive revamping of the limited
partnership.
AIFMD Passport versus National Private Placement Regimes
While the distribution of certain AIFs in the EU is still subject to various national private placement regimes (“NPPR”),
the introduction of the Passport will enable a non-EU AIFM to market a Luxembourg AIF to professional investors
in any Member State without an additional authorisation or registration obligation.The AIFMD requires a precise
mapping exercise in order to determine its scope of application.The AIFMD thus applies to:
• Luxembourg funds that are managed by non-EU fund managers, for so long as NPPRs have not been phased
out and depending on the decision of each individual EU country (at the latest currently foreseen for 2018)
• Managers of some closed-ended AIFs existing at the final date of transposition may benefit from grandfathering
clauses, namely:
1. Managers of closed-ended AIFs “which do not make any additional investments” after mid-2013
2. Managers of fully subscribed closed-ended AIFs which had their final close prior to July 2011 and are
constituted with a maximum life that requires them to be liquidated by mid-2016 at the latest,with certain
exceptions that need to be respected
• Small and mid-sized AIFMs falling below the de minimis thresholds of either €100 million or €500 million (leveraged
and non-leveraged respectively)
• Luxembourg SOPARFIs*
• Luxembourg securitization vehicles*
On the distribution of AIFs the next important milestone dates of the AIFMD will be mid-2015 (availability of EU
passport for third-country alternative funds and alternative fund managers) and mid-2018 (end of EU national
private placement regimes).
* on a case-by-case basis

31
On 22 July 2013, the European Commission published
Regulations on European Venture Capital Funds
(“EuVECAs”) and European Social Entrepreneurship
Funds (“EuSEFs”) with the incentive to address a
fragmented and dispersed European Venture Capital
industry and lay down a common framework of rules
across the European Union (“EU”) for EuVECA and
EuSEF managers eager to raise capital on a cross-
border basis.
As a means to achieving a proper level playing field,
the Regulations – which are applicable in EU Member
States without any further national implementing
measures – submit EuVECA and EuSEF managers
to an identical set of rules across the EU such as
the composition of the portfolio of funds, eligible
investment targets, eligible investment tools and the
targeted investor base. The fulfilment of the various
rules laid down in the Regulations grant EuVECA and
EuSEF managers access to an EU-wide passport for the
purpose of marketing distinctively labelled ‘EuVECA’
and ‘EuSEF’ funds.
An interesting parallel may furthermore be drawn
in relation to the AIFMD since the Regulations apply
to EuVECA and EuSEF managers of AIFs within the
meaning of the AIFMD,who are subject to registration
formalities with the competent authorities of their
home Member States and who manage portfolios
of qualifying venture capital funds, whose assets
under management do not exceed a threshold of
€500 million. Contrary to the AIFMD however, the
Regulations shall only apply to EuVECA and EuSEF
managers as well as to EuVECAs and EuSEFs which
are established in the EU.
8.The Regulation on European Venture Capital Funds

9 . P r i va t e E q u i t y S e r v i c e s P r ov i s i o n
32
9. Private Equity Services Provision
The dense network of recognized and highly professional service providers is a major
component of the success of Luxembourg.
9.1. Context and overview
The Luxembourg Private Equity fund administration sector basically falls into 2 categories: large international
administrators servicing all fund ranges, including Private Equity funds, as well as independent local and
international specialist administrators.
According to industry information at the beginning of 2013 over 75% of all Private Equity service providers had
already implemented or were in the process of implementing dedicated Private Equity desks and systems.
Today, the vast majority of Private Equity administrators offer the full range of central administration services,
including domiciliation, administration, accounting, tax filing and company secretarial services to AIF including
their controlled special purpose vehicles located in Luxembourg or abroad.
9.2. Depositary services
Depositary services for regulated Private Equity structures comprise the following two specific components: the
safekeeping and the monitoring of the structure’s assets.
The depositary services for regulated vehicles are only performed by credit institutions or investment firms. The
AIFMD Law permits certain closed-ended AIFs to appoint as depositary non-banking institutions provided the
relevant AIF and assimilated structures generally do not invest in assets that must be held in custody (i.e.financial
instruments). This depositary function is only open to qualifying PSFs serving as professional depositary of assets
other than financial instruments.
9.2.1. Monitoring function
As Private Equity fund assets are usually not physically safeguarded by the depositary itself, the depositary will
have to focus on its oversight duties. In such case the scope of the supervision and oversight function of the
depositary implies:
• Handling of the legal documentation related to the transactions carried out
• Compliance monitoring of the cash and securities flows linked to transactions
• Control of any single transaction including settlement
• Implementation of an internal verification check list and escalation procedure
• Monitoring of subscriptions and redemptions
• Valuation duties
9.2.2. Safekeeping of assets
Following a steep learning curve after the introduction of the SICAR in 2004,Luxembourg based depositaries are
today very well positioned to perform these legal duties under the AIFMD.The know-how of Luxembourg-based
depositary institutions in providing a full range of customised services for Private Equity structures is nowadays
widely recognized.
The services cover all investment and divestment processes, such as:
• Follow-up of board approval process as well as collection of underlying agreements and documentation
related to the transactions
• Supervision and monitoring of investments and divestments
• Asset registration in the name of the vehicle under the supervision of the depositary
• Compliance checks with the investment policy as described in the private placement memorandum/
offering memorandum

33
In addition, the depositary, in its role as paying agent
or in cooperation with the transfer agent, may also
offer, among others, the following services:
• Processing of payments linked to the underlying
investments
• Collection of interest income and dividends from
underlying investments
• Processing of corporate events on underlying
investments
• Liaison with local correspondents,lawyers,notaries
and others service providers
• Recording of documentation and data back-up
• Collateral management services
• Tax reclaim management services (withholding
tax treaty)
• Collection of subscription proceeds
• Payment of redemption amounts
• Execution of dividend payments to investors
9.3. Banking services
Luxembourg banks offer cash management services,treasury,foreign exchange management,bridge financing
and management of escrow accounts to their Private Equity clients.
9.4. Legal, tax and audit services
Luxembourg avails itself of significant expertise in legal and tax matters through numerous local and international
law firms, tax advisors and audit firms experienced in Private Equity structuring and servicing.
Genii Capital not only selected Luxembourg as a basis for its PE Asset Management activity because the
company originates from Luxembourg and has sister companies already managing real estate proprietary
funds, but mainly for the different tax benefits and pragmatic business approach Luxembourg offers to the Private
Equity players in the industries we focus on. There are a multitude of regimes related to sales of online services
or Intellectual Property tax optimization that we can use and directly propose to our portfolio companies or
targets, mostly innovative and pioneering in their domains. Also, the interaction with the different administrative
bodies allows us to have an added value advisory role towards our portfolio companies as well as investors
and Limited Partners. The availability of many double tax treaties and the independence of Luxembourg are
definitely strategic assets for us, offering a flexible framework for most investment schemes right from the centre
of the European Union.
Eric Lux, CEO of Genii Capital

1 0 . H o w t o s e t u p a P r i va t e E q u i t y F u n d i n L u x e m b o u r g
34
10. How to set up a Private Equity Fund in Luxembourg
The below table provides an overview of the most relevant steps in setting up a Private
Equity structure in Luxembourg. It particularly focuses on those issues that are specific to
Luxembourg.
Each project being obviously individual, the table purports to provide general guidelines.
Phases
Activities in
Luxembourg
Activities outside
Luxembourg
Comments
Analysis
Phase
Domicile of Investors
Countries of target companies
ÎÎ Choice of Fund Jurisdiction
ÎÎ Choice of other jurisdictions
required in efficient tax
structuring
ÎÎ Choice of legal/tax advisors
Domicile of Investors
Countries of target
companies
ÎÎ Choice of Fund Jurisdiction
ÎÎ Choice of other jurisdictions
required in efficient tax
structuring
ÎÎ Choice of legal/tax advisors
Preparation
Phase
Definition of legal and tax
structure
Preparation of terms sheet
Selection of all service
providers (Central
administrator, depository,
auditor)
Depository only for
SICAR and SIF, auditor
depending on certain
criteria
Pre-Filing
Phase
Preparation of legal
documentation
Preparation of application file to
the CSSF
ÎÎ PPM
ÎÎ Subscription Agreement
ÎÎ Articles of Association of all
companies
ÎÎ CVs of all directors/ managers
ÎÎ Certificate of good standing
ÎÎ Service provider agreements
ÎÎ CSSF “information request for
authorization” questionnaire
ÎÎ Risk Management & Conflict of
Interest Procedures
Only for SICAR and SIF
Alllegaldocumentation
and filing with the
CSSF can be done in
English, German or
French

35
Phases
Activities in
Luxembourg
Activities outside
Luxembourg
Comments
Filing
Phase
Filing Final presentation of
documentation to Limited
Partners
Final fundraising stage
Only for SICAR and
SIF
Implementation
Phase
Approval of the File
Incorporation of the companies
Registration of the company
with the Luxembourg Trade
and Companies Register (RCS)
and publication of the deed of
incorporation in the Mémorial
Client Acceptance Procedure
(Transfer Agent and GP)
Set-up of fund with service
providers
Signature of subscription
agreements
First capital call
Only for SICAR and
SIF
We at Bamboo Finance recognize that Luxembourg not only offers a stable legal environment but also highly
professional service providers for Private Equity funds. Luxembourg evolved as a preferred place of incorporation
for many microfinance investment vehicles over the past years and, more recently, impact investment funds.
Our investors recognize these advantages. We therefore believe that Luxembourg’s developed infrastructure for
impact investment funds will help strengthening its competitive position and attract further funds in the future.
Christian Schattenmann, Bamboo Finance

1 1 . G l o s s a r y
36
1 1 . G l o s s a r y
11. Glossary
AIF:
AIFMD:
AIFMD Law:
Capital Call:
Carried Interest:
CSSF:
EUSD:
FCP:
GP:
ICT:
IFRS:
IMF:
1915 Law:
LP:
LPEA:
Lux GAAP:
PSF:
Alternative Investment Fund as defined in the AIFMD Law.
Directive 2011/61/EU of the European Parliament and of the Council of 8 June 20111
on Alternative Investment Fund Managers and amending Directives 2003/41/EC and
2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010.
The Law of 12 July 2013 implementing Directive 2011/61/EU into Luxembourg law.
Written notice to Limited Partners requesting them to make a capital contribution to
the fund vehicle (within the limits of their subscription commitment) in order to permit
the fund vehicle to pay for its investments or to pay expenses.
Carried interest or carry is a share of the profits of the fund vehicle that is paid to
the general partner and/or the investment manager/advisor in excess of the amount
that the general partner/manager/advisor contributes to the fund vehicle. In order to
receive carried interest, the fund vehicle must first return all capital contributed by the
investors,and,in certain cases,the fund must also return a previously agreed-upon rate
of return (the “hurdle rate” or “preferred return”) to investors.
Commission de Surveillance du Secteur Financier, the Luxembourg supervisory
authority of the financial services sector.
COUNCIL DIRECTIVE 2003/48/EC of 3 June 2003 on taxation of savings income in the
form of interest payments
Fonds Commun de Placement, an undivided co-ownership of assets or proprietorship
managed by a management company.
The general partner of either a corporate partnership limited by shares (S.C.A.), a
common limited partnership (S.C.S.) or a special limited partnership (S.C.Sp.). The
managing general partner is normally jointly and severally liable with the partnership
for any liabilities which may not be satisfied out of partnership assets.
Information and Communication Technology.
International Financial Reporting Standards.
International Monetary Fund.
Law of 10 August 1915 on commercial companies, as amended.
The limited partner, typically an investor or limited shareholder in a fund vehicle;
limited partners enjoy limited liability (i.e., up to the amount invested or committed for
investment).
Luxembourg Private Equity & Venture Capital Association.
Luxembourg Generally Accepted Accounting Principles.
Most frequently used accounting framework in Luxembourg for PE vehicles.
Professionnel du Secteur Financier,a professional of the financial services sector; each
PSF is subject to the prior authorisation and ongoing prudential supervision by the CSSF.

37
RCS:
S.A.:
S.à r.l.:
S.C.A.:
S.C.S.:
S.C.Sp.:
SICAR:
SICAV:
SIF:
SOPARFI:
Subscription Tax:
TMT:
UCI:
UCITS:
VAT:
“Well-informed
investors”:
Registre de Commerce et des Sociétés, the Luxembourg register of commerce and
companies.
Société Anonyme, public limited liability company.
Société à Responsabilité Limitée, private limited liability company.
Société en Commandite par Actions, corporate partnership limited by shares.
Société en Commandite Simple, common limited partnership.
Société en Commandite Spéciale, a special limited partnership without legal
personality introduced into Luxembourg law by the AIFMD Law.
Société d’Investissement en Capital à Risque, investment company investing in risk
capital only.
Société d’Investissement à CapitalVariable, investment company with variable capital.
Specialized Investment Fund, a collective investment scheme governed by the law of
13 February 2007 on specialised investment funds, as amended.
Société de Partipation Financière, a mere marketing acronym used to designate
an ordinary commercial company governed by the 1915 Law and which is used as
a vehicle for holding participations in Luxembourg or foreign companies or other
instruments.
Also: Taxe d’Abonnement, a tax of 1 basis point assessed on the net asset value and
payable by certain collective investment schemes only.
Telecomunication/ Media/ Technology.
Undertakings for Collective Investments, collective investment schemes governed by
the law of 17 December 2010 relating to undertakings for collective investment, as
amended.
Undertaking for Collective Investments in Transferable Securities, collective investment
schemes organbized in accordance with Directive 2009/65/EC of the European
Parliament and Council of 13 July 2009 on the coordination of laws, regulations
and administrative provisions relating to undertakings for collective investment in
transferable securities (UCITS).
Value Added Tax.
Well-informed investors are:
• Institutional investors
• Professional investors
• Any other investor who declares in writing that he/she/it is an informed investor,and
either invests a minimum of €125,000 or benefits from an appraisal from a bank,
an investment firm or a management company certifying that he/she/it has the
appropriate expertise, experience and knowledge to adequately understand the
investment made in the relevant collective investment scheme.

1 2 . U s e f u l R e f e r e n c e s
38
12. Useful References
• Luxembourg Private Equity & Venture Capital Association - LPEA: www.lpea.lu
• Luxembourg fund association - ALFI: www.alfi.lu
• Regulator of the Financial services industry - CSSF: www.cssf.lu
• Luxembourg for Finance, the agency for the development of the financial services industry: www.lff.lu
• List of PSF: www.cssf.lu/en/psf-en/official-list
• List of registered SICARs: www.cssf.lu/fileadmin/files/Listes/Entites_surveillees
• List of registered SIFs: www.cssf.lu/fileadmin/files/Listes/Entites_surveillees
• List of registered AIFMs: www.cssf.lu/fileadmin/files/Listes/Entites_surveillees/liste_AIFM_280814.pdf
• Questionnaire of the CSSF for applications for SICARs: www.cssf.lu/en/sicar
• Q&A of the CSSF concerning SICARs: www.cssf/sicar/questions-et-responses-en matiere-de-sicar
• Questionnaire of the CSSF for applications for any other vehicle regulated by the CSSF (OPC/FIS):
www.cssf.lu/formulaires
• List of double tax treaties: www.impotsdirects.public.lu/conventions/conv_vig/index.html
• Law of 1915: www.legilux.public.lu/leg/textescoordonnes/guides/law_commercial_companies
• Law of 12 July 2013 implementing the AIFMD: www.legilux.public.lu/leg/a/archives/2013/0119/index.html
• Law of 28 July 2014 on immobilisation of bearer shares:
www.legilux.public.lu/leg/a/archives/2014/0161/index.html
• EuVECA Regulation No. 345/2013:
http://old.eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:115:0001:0017:EN:PDF
• EuSEF Regulation No. 346/2013 of 22 July 2013:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:115:0018:0038:EN:PDF
• Règlement grand-ducal du 28 octobre 2013 relatif aux taxes à percevoir par la CSSF
www.cssf.lu/fileadmin/files/Lois_reglements/Legislation/RG_NAT/RGD_281013_taxes_CSSF.pdf

39
13. List of LPEA Members
Private Equity Firms
• 3i Luxembourg
• AC Nordic Investments S.àr l.
• Adiant Solar Opportunities I SA
• Advent Life Sciences LLP
• Alpha Private Equity Fund Mgnt. Cy.
• AMI (Luxembourg)
• Aquasourca S.A.
• Bain Capital Luxembourg S.à r.l.
• Bamboo Finance S.A.
• BIP Investment Partners S.A.
• Bridgepoint Services S.à r.l.
• CapMan Plc
• CIE Property S.à r.l. (BC Partners)
• Cinven Luxembourg S.à r.l.
• Cipio Partners S.à r.l.
• CVC Capital Partners (Luxembourg)
• DHC Luxembourg V S.à r.l.
• EQT Management S.à r.l.
• Equinox S.A.
• Eurazeo Management Lux S.A.
• European Investment Fund
• Fieldpoint
• Five Arrows Managers
• Genii Capital S.A.
• GGM Venture Capital
• HgCapital (Luxembourg) S.à r.l.
List as of November 2014
• IDI Emerging Markets
• IK Investment Partners Luxembourg S.à r.l.
• Investindustrial S.A.
• (Bi-Invest Advisors S.A.)
• LetterOne Holdings S.A.
• Lone Star Capital Investments S.à r.l.
• Luxempart S.A.
• Mangrove Capital Partners
• Marguerite Adviser S.A.
• Monitor Clipper Partners
• Nordic Capital S.à r.l.
• Oaktree Capital Management (by OCM
Luxembourg POF IV S.à r.l.)
• PAI Partners
• Permira Luxembourg S.à r.l.
• Riverside
• Royalton Partners S.A.
• Sofina Private Equity SCA, SICAR
• Sting & Partners SCA
• SwanCap Investment Management S.A.
• The Carlyle Group Lux S.à r.l.
• TPG Capital Luxembourg S.à r.l.
• Trilantic Capital Partners LP Inc.
• Warburg Pincus S.à r.l.
• Wert Investment Holdings S.à r.l.
• Winvest Conseil S.à r.l.
39

Disclaimer:
LPEA believes the information contained in this documentation to be reliable and correct. However, LPEA makes no
representation or warranty (express or implied) as to the accuracy, completeness or continued availability of the information
and data available from this documentation. To the fullest extent permissible under applicable law, LPEA does not accept
any responsibility or liability of any kind, with respect to the accuracy or completeness of the information and data from this
documentation.The information and data provided in this documentation are for general information purposes. It is not legal,
tax or investment advice nor can it take account of your own particular circumstances. If you require any advice, you should
contact a financial or other professional adviser. No material in this documentation is an offer or solicitation to buy or sell any
professional services, financial products or investments.
Private Equity Services Providers
• ABN AMRO BANK (Luxembourg) S.A.
• AIG
• Allen & Overy Luxembourg
• Alter Domus
• Arendt & Medernach
• Astris S.à r.l.
• AtoZ S.A.
• AVEGA S.à r.l.
• Aztec Financial Services (Luxembourg) S.A.
• Baker & McKenzie Luxembourg
• Banque de Luxembourg
• Banque Privée Edmond de Rothschild
• BDO Tax and Accounting
• BIL Luxembourg
• Bonn & Schmitt
• Bonn Steichen & Partners
• Brown Brothers Harriman (Luxembourg) S.C.A.
• Caceis Bank Luxembourg
• Capita Fiduciary S.A.
• CBP Quilvest S.A.
• Citco Luxembourg
• Citibank International PLC.
• Clément & Avocats
• Clifford Chance
• Crestbridge S.A.
• Deloitte S.A.
• DLA Piper Luxembourg S.à r.l.
• DLP Law Firm S.à r.l.
• Elvinger, Hoss & Prussen
• Ernst & Young
• Etude Loesch
• Experta Corporate & Trust Services S.A.
• Grant Thornton PKF Weber & Bontemps
• Halsey Group S.à r.l.
• Hogan Lovells (Luxembourg) LLP
• ING Luxembourg S.A.
• Intertrust (Luxembourg) S.à r.l.
• Ipes (Luxembourg) S.à r.l.
• JTC (Luxembourg) S.A.
• KBL European Private Bankers S.A.
• King & Wood Mallesons (SJ Berwin
Luxembourg)
• Kleyr, Grasso Associes
• KPMG
• Linari Law Firm
• Linklaters LLP
• Loyens & Loeff
• LRI Invest S.A.
• Luther Law Firm
• Luxembourg International Consulting S.A.
• Luxembourg Investment Solutions S.A.
• LuxGlobal Trust Services S.A.
• Mazars Luxembourg S.A.
• MNKS
• Ogier
• OPF Partners Luxembourg
• Oppenheim Asset Management Services
• Pandomus
• Pictet & Cie (Europe) S.A.
• PricewaterhouseCoopers
• RBS Global Banking (Luxembourg) S.A.
• Roemers Trapp Pautot
• Sanne Group (Luxembourg) S.A.
• Sedlo Jimenez Lunz
• SGG S.A.
• Société Européenne de Banque - Intesa
SanPaolo
• Société Générale Bank & Trust
• State Street (Alternative Investment
Solutions)
• Stibbe Avocats
• TMF Luxembourg S.A.
• United International Management S.A.
• Vandenbulke
• Vistra Luxembourg S.à r.l
• Wildgen, Partners in Law
List as of November 2014
Contributions for this document were provided by the following LPEA members: Elvinger, Hoss & Prussen, Etude
Loesch, EY and PwC.
© Copyright, 2014 LPEA
1 3 . L i s t o f L P E A M e m b e r s
• 40

LUXEMBOURG PRIVATE EQUITY & VENTURE CAPITAL ASSOCIATION
LPEA | Bâtiment Président Park | 8, rue Albert Borschette | L-1246 Luxembourg
E-mail: lpea-office@lpea.lu | Telephone: + 352 40 78 78 483

Private Equity in Luxembourg (2014)

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