How to Set Up a RAIF Fund in Luxembourg Within 6 Weeks

John A3 days ago

0 8 5 minutes read

FundSetup, headquartered in DIFC, Dubai, United Arab Emirates, is a leading authority in international fund structuring and regulatory advisory. We specialize in the efficient formation of Reserved Alternative Investment Funds (RAIFs) in Luxembourg, a structure that is revolutionizing the investment landscape in Europe for professional investors. With the right partners and guidance, it’s possible to launch a fully operational RAIF in just six weeks.

This comprehensive guide will walk you through everything you need to know to set up a RAIF in Luxembourg, from initial planning to full launch. Our goal is to give you a clear roadmap to get your fund up and running quickly, efficiently, and fully compliant with Luxembourg and EU regulations.

What is a RAIF (Reserved Alternative Investment Fund)?

The Reserved Alternative Investment Fund (RAIF) is a modern investment vehicle introduced under the RAIF Law of 23 July 2016. Unlike other Luxembourg funds such as SIFs or SICARs, the RAIF does not require direct supervision or approval from the CSSF (Luxembourg’s financial regulator). Instead, the regulatory oversight is performed indirectly via an authorized Alternative Investment Fund Manager (AIFM).

This structure allows for rapid deployment while maintaining full compliance with AIFMD (Alternative Investment Fund Managers Directive). It is ideal for professional and well-informed investors who seek speed to market, regulatory efficiency, and asset-class flexibility.

Top Advantages of RAIF Structure in Luxembourg

A RAIF offers several strategic benefits that make it the preferred vehicle for fund sponsors worldwide:

No CSSF Approval Required – Save months in regulatory processing time
EU Passporting – Market freely across the EU via the appointed AIFM
Broad Asset Scope – Invest in private equity, real estate, hedge strategies, infrastructure, debt, and more
Flexible Legal Forms – Choose from SICAV, SCSp, SCA, SCS, or SA
Attractive Tax Regime – Up to 0% tax for certain structures like SCSp or low 0.01% subscription tax
Fast Setup Timeline – Launch fully within 6 weeks with proper structuring

Who Can Launch or Invest in a RAIF?

A RAIF can only be launched by or for the benefit of:

Professional investors as defined under MiFID II
Well-informed investors, with:
- Minimum investment of €125,000
- OR written confirmation of professional knowledge
- OR confirmation from a bank, fund manager, or financial advisor of suitability

Retail investors are strictly excluded from RAIF structures, ensuring the focus remains on sophisticated market participants.

Step-by-Step Guide: Setting Up a RAIF Fund in Luxembourg in 6 Weeks

Week 1: Planning, Structuring, and Appointing Partners

The foundation of a successful RAIF is detailed planning. During this initial phase, we:

Define the fund strategy and objectives
Identify the target investor base
Choose the appropriate legal form (SCSp is the most common for private equity and real assets)
Select and onboard an authorized AIFM based in Luxembourg or another EU state
Identify service providers:
- Fund Administrator
- Depositary
- Legal Counsel
- Auditor
Draft a business plan and define operational workflows

FundSetup ensures the process is fast-tracked by connecting you with pre-vetted service providers and legal teams.

Week 2: Drafting Legal and Regulatory Documents

This phase includes the preparation of key documentation to ensure your RAIF meets Luxembourg legal standards:

Private Placement Memorandum (PPM) or Offering Memorandum
Limited Partnership Agreement (LPA) for SCSp structures
AIFM Investment Management Agreement
Depositary and Custodian Agreement
Administration Services Agreement
Compliance policies including AML/CFT, risk management, valuation, and conflicts of interest

We collaborate with expert law firms to draft documents that meet both Luxembourg RAIF Law and EU AIFMD requirements.

Week 3: Compliance and AIFM Integration

Once the documents are drafted, the next focus is on compliance setup:

Onboarding with the licensed AIFM
Implementing investment and risk management policies
Setting up AML/KYC procedures
Coordination with compliance officers and MLROs
Preparation of marketing notification documents for EU passporting

The AIFM is responsible for regulatory oversight, investor protection, and EU cross-border marketing via Article 32 of AIFMD.

Week 4: Corporate Structuring and Operational Setup

At this stage, we handle the corporate formalities:

Incorporation of the RAIF entity at the Luxembourg Business Register
Bank account opening in Luxembourg for subscriptions and capital calls
Operational setup by fund administrator (investor portal, back-office systems)
Finalization of board composition and governance documents
Coordination of audit processes

FundSetup facilitates this phase by ensuring timely communication between all providers and compliance with the Luxembourg Commercial Code.

Week 5: Pre-Marketing, Investor Preparation, and Soft Launch

With the structure in place, we now prepare for your RAIF’s public face:

Create professional investor decks and presentations
Arrange roadshows and webinars for anchor investors
Prepare and distribute subscription documents and onboarding kits
Conduct soft launch with cornerstone investors
Begin EU marketing notifications where required

FundSetup provides templates, automation tools, and experienced marketing advisors to streamline your fund’s investor outreach.

Week 6: Capital Raising and Fund Launch

In the final week:

Subscription process begins
Capital calls issued
Investor funds received and allocated
Investment activity starts under AIFM supervision
Launch communication sent to stakeholders and regulators

The RAIF is now live, operating under full compliance, and ready to execute its investment strategy.

Legal Structures Available for RAIF in Luxembourg

A RAIF may adopt any of the following legal forms:

SICAV (Investment Company with Variable Capital)
SCSp (Special Limited Partnership)
SCS (Common Limited Partnership)
SCA (Corporate Partnership Limited by Shares)
SA (Public Limited Company)

Each structure has distinct implications for governance, liability, taxation, and investor control. SCSp is currently the most popular due to its tax transparency and contractual flexibility.

Taxation Benefits of RAIF in Luxembourg

The RAIF regime offers outstanding tax efficiencies:

SCSp RAIFs are typically tax transparent, paying no corporate or income tax
SICAV structures pay a 0.01% subscription tax, with no withholding tax on dividends
No VAT on fund management services
EU tax treaties available through Luxembourg’s global network
Capital gains and profits usually flow tax-free to investors

FundSetup works closely with tax consultants to structure your RAIF optimally based on your target investors and jurisdictions.

Post-Launch Compliance and Reporting

After your RAIF is launched, ongoing obligations include:

Annual audit and financial reporting
Quarterly NAV calculation
Periodic investor reports
FATCA/CRS compliance
AIFMD Annex IV reporting
Ongoing AML/KYC checks

FundSetup provides fund administration and compliance outsourcing services so you can focus on performance, not paperwork.

Why Choose FundSetup to Launch Your Luxembourg RAIF?

Expertise: Decades of fund structuring experience across jurisdictions
Speed: RAIF launch in 6 weeks or less
End-to-End Services: Legal, regulatory, tax, administration, and compliance
EU + Middle East Focus: Strong presence in both markets
Trusted Network: Pre-approved AIFMs, legal firms, and banks

We handle the complexity so you can focus on capital raising and investment performance.

Get in Touch Today to Launch Your RAIF in Luxembourg

Ready to structure your investment strategy through a Luxembourg RAIF? Partner with FundSetup and let us help you create a fully compliant, fast-launch, and tax-efficient fund in one of the world’s top jurisdictions.

📍 DIFC, Dubai, United Arab Emirates
📞 +971 23 567 9000
📧 fundsetup.net@gmail.com