Ernst &Young >Industries> real estate > services - Ernst & Young - Luxembourg

Ernst & Young has dedicated accounting, advisory, assurance, auditing, corporate finance, tax compliance, and tax advisory resources. Our broad base of experience allows us to provide a full range of professional services to clients involved in all sectors of the real estate and construction industries.

• Fund Launch Services

• Recurring Services

Fund Launch Services

The Real Estate Group has developed customised advisory service covering each phase of the set-up of a Luxembourg real estate funds from commercial design to governance structures. We are the experts in setting up pan-European and other diversified real estate funds.

Furthermore, we play a key role in developing best practice guidelines, standards and studies. For example, we were instrumental in the development of the Association of the Luxembourg Fund Industry’s (ALFI) FAQ for Real Estate and its Real Estate Survey; we also collaborate actively with international organisations such as INREV, EPRA and EVCA.

• Commercial design
• Structures
• Valuation & Reporting
• Operations
• Processes & controls

• Comment on the overall commercial objectives and design criteria

• Assistance in the design of the issue/redemption mechanism

• Review of the fee calculations and allocations between the Promoter, Investment Advisor and Management Company and sub-funds

• Review the Private Placement Memorandum ("PPM") and the Management Regulations to ensure they clearly reflect the intended structure and meet legal and regulatory requirements

• Review of the income and NAV distribution mechanism to ensure compliance with the PPM and Management Regulations as well as any applicable laws and regulations

• Test the performance fee calculations (if any) of the funds and ensure their clear documentation

• Assistance in the overall design of the tax structure. This would be documented in a structuring memo covering high level advice on a recommended fund structure. It would also take account of the potential tax status of investors and consider tax issues related to their migration of assets into the fund

• Review of current compliance of structure with applicable regulation (in conjunction with your legal advisors)

• High level review the proposed tax compliance process to ensure it is capable of supporting the proposed structure

• Drafting/Review the tax section of the PPM

• Review of the accounting principles of the funds financial statements to ensure they meet legal and regulatory requirements as well as the contractual requirements outlined in the PPM and Management Regulations

• Review of the methodology of the NAV computation to ensure appropriate adjustments are being made to the equity derived from the financial statements

• Review of valuation process and methodology and its definition in the PPM and Management Regulations

• Review of the reporting packages (if applicable)

• Assistance in establishing t he financial statement template and investor reporting framework

• Facilitate a high level walkthrough of the business processes of the fund with all service providers

• Assistance with the review and documentation of the significant business processes of the fund including in the definition of the roles and responsibilities of key functions (such as finance and treasury and fund accountant etc). We aim to give you critical feedback and outline best practice in this area

• Organization and delivery of training for service providers (if required)

• Review the design of controls over the significant business processes and transactions of the fund

• Test the operational effectiveness of key controls

• Review of overall risk management analysis and strategies

• Review of the overall corporate governance framework of the fund including the monitoring of internal control effectiveness, operated both by service providers and fund personnel

Recurring services

• Assurance and Audit
• Financial Accounting and Reporting
• Tax Compliance and Risk Management
• Corporate Secretarial
• Advisory Services

The Real Estate Group is the leading auditor for real estate investment funds in Luxembourg. Our audit and advisory services are tailored to the individual vehicle. We deliver:

• High quality and effective audit with no last minute surprises

• Independent feedback on the operation of your governance structure

• Experienced and dedicated team integrating, tax, valuation and industry experts

• High quality and practical GAAP advice

• Established relationships with local audit teams in the countries targeted by the fund

• Ensure that the financial statements provide complete and transparent information to investors

• Provide continual feedback on the quality of the business processes and controls of the fund

• Alignment of our audit approach on the funds` inherent risks, critical success factors and business processes which are important to stakeholders

• Independent feedback on potential regulatory and tax issues

• Validation of performance measures, distribution and performance fee models

Our group can support you in preparing your financial reports and guide you through the complexities of the relevant accounting principles:

• Reconciliation between the accounting and the bank accounts

• Bookkeeping services

• Preparation of internal reporting package under agreed format

• Analytical review of the accounts and preparation of executive summary of findings

• Preparation of the ageing balance and of the inter-company reconciliation

• Preparation of financial statements in accordance with local or IFRS o r US GAAP (if required for group consolidation purposes)

• Assistance to the external auditors

• Continuous assessment of changes in GAAP and updates to accounting policies

• Continuous assessment of changes in various regulatory requirements, including but not limited to Luxembourg Law

The tax advisory team can support you with all aspects of taxation and tax compliance relating to your fund, including:

• Preparation of annual corporate income tax return and municipal business tax returns

• Preparation of the monthly and annual VAT returns

• Determination of the annual unitary value of the company for net worth tax purposes

• Tax compliance for legal entities (VAT, direct, 3% tax return)

• Tax compliance for the investors

• German tax reporting

The group can provide assistance in organising the shareholder meetings and with official filing procedures:

• Assistance in convening and holding of board of director and shareholder meetings

• Assistance in the preparation of board of directors’ meeting reports and minutes of shareholder meetings including supporting documentation

• Co-ordination with notaries, compilation of a supporting file to the notarial deed and attendance with the company representative at the meeting

• Guidelines on the procedures required for registrations with the Luxembourg Trade and Company Register

• Implementation of prospectus and management regulations

• Advice and structural set-up of all other required fund documentation

• Critical review of service agreements, legal documents and working protocols with third parties

• Liaison and coordination with the Luxembourg supervisory body (CSSF) and other official bodies

• Assistance with listing on Luxembourg Stock Exchange

• Coordination with outside legal firms where necessary