A comparison of Investment Fund options across three jurisdictions
The following table shows the similarities and differences between the BVI, Cayman and, Luxembourg Investment Funds across 27 different areas.
[1] Undertakings for Collective Investment in Transferable Securities (UCITS).
[2] Refers to undertakings for collective investment (alternative investment funds or AIFS) under the Alternative Investment Fund Managers Directive dated 8 June 2011 (AIFMD), which raise capital from a number of investors with a view to investing it in accordance with a defined investment strategy for the benefit of those investors, and which do no not qualify as UCITS.
[3] Set up under Part II of the Luxembourg Law of 17 December 2010 on undertakings for collective investment.
[4] Set up as a specialised investment fund (SIF).
[5] Investing in risk capital (Société d'investissement en capital à risque or SICAR).
[6] Set up as a reserved alternative investment fund (RAIF).
[7] Set up and subject to the European long-term investment funds regulation (ELTIF) regulation which covers funds that focus on investing in various types of alternative asset classes such as infrastructure, small and medium sized enterprises and real assets.
[8] A fund set up subject to the European venture capital funds regulation covers a sub-category of alternative investment scheme that focuses on start-ups and early stage companies.
[9] A fund set up subject to the European social entrepreneurship funds regulation which covers alternative investment schemes that focus on social enterprises.
[10] A limited partnership agreement (LPA).
[11] a) AIFMs managing AIFs which are not leveraged and without redemption rights for a period of five years, and with aggregate assets under management below €500 million; b) AIFMs managing AIFs whose assets under management, including any assets acquired through the use of leverage, do not exceed €100 million.
These AIFMs must register with the CSSF and provide an annual report but no further obligations under the AIFMD. However, they do not benefit from the AIFMD pre-marketing and marketing passport.
[12] The Law on the financial sector.
[13] CSSF FAQ “Persons involved in AML/CFT for a Luxembourg Investment Fund or IFM supervised by the CSSF for AML/CFT purposes” dated 25 November 2019 and CSSF FAQ “AML/CFT RC Report” dated 1 March 2022.
[14] Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (the SFDR).
[15] The time frame will vary for closed-ended funds listing under the EU Prospectus Directive.
[16] Directive (EU) 2019/1160 of 20 June 2019 (CBFD Directive).
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Related content
For in-depth guides and insightful commentary from the fund industry, as well as updated information on your regulatory obligations as an operator of an offshore fund, we invite you to click on the icons below.