Luxembourg adopts AIFM Law

10 July 2013

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On 10 July 2013, the Luxembourg Parliament adopted the Luxembourg Alternative Investment Fund Managers (AIFM) Law transposing the AIFM Directive1.

Luxembourg’s AIFM Law faithfully reflects the AIFM Directive while at the same time offering the alternative investment industry a pragmatic and flexible approach to the implementation of the AIFM Directive; for example, it offers alternative investment groups the opportunity to choose the operating model which best suits their needs.

The AIFM Law creates a specific stand-alone legal framework for AIFM. The Luxembourg AIFM regime will exist alongside Luxembourg’s established regulated management company regimes2.

Existing management companies of alternative investment funds (AIF) will be able to obtain AIFM authorization, or, alternatively, continue acting as management companies of the AIF without being authorized as AIFM, provided that they designate an authorized AIFM or provided that the AIF assets under management remain below the AIFM Directive de minimis thresholds. This allows alternative investment groups to leave existing AIF structures unchanged.

On the product side, Luxembourg’s AIFM Law leaves existing AIF product regimes in place. However, they are amended, inter alia, to ensure that an AIF which is managed by an AIFM meets the AIFM Law requirements.

The AIFM Law also updates a number of related Laws, inter alia, with a view to:

  • Creating a new status of financial sector professional: depositary of assets other than financial instruments
  • Creating a new “special limited partnership” (S.C.Sp.) regime, based on the UK English Limited Partnership
  • Providing legal certainty in relation to the taxation of carried interest paid to managers of AIF
  • Exempting management services provided to AIF from VAT
  • Subjecting SICARs to conflicts of interest requirements similar to those applicable to SIFs

For further information on Luxembourg’s AIFM implementation, download our AIF Club Alert entitled Luxembourg open for AIFM applications (pdf, 370kb) .

How EY can help


EY has established a solid track record on accompanying alternative investment groups (including promoters, sponsors, advisers, general partners and managers of AIF) and service providers in their AIFM implementation projects across Europe.

We help alternative investment groups to perform a strategic review of the opportunities and challenges of the AIFM Directive and the Luxembourg AIFM Law.

EY then supports alternative investment groups in defining their post-AIFM product ranges and organizational models, and guiding them through the business reorganization and implementation phases, including operational alignment and compliance. We are helping service providers, such as depositaries, to implement an operational framework which meets the requirements of the AIFM Directive.

In Luxembourg, EY’s Alternative Investment Fund Club provides alternative industry practitioners with a platform to meet, exchange views and network, benefiting from EY’s insight into the alternative sectors and the specific challenges they face. Further information is available on ey.com/lu/aif-club and ey.com/lu/aifm.

1At the time of writing, Council of State had not yet granted dispensation from the requirement to hold a second constitutional vote.
2UCITS management companies (Chapter 15 management companies) and non-UCITS management companies (Chapter 16 management companies).