SCSp Luxembourg: What is it and when to use it?

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Published on
May 6, 2025
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Definition: What is a SCSp (Société en Commandite Spéciale)?

A Société en Commandite Spéciale (SCSp) is a Luxembourg business structure introduced in 2013. Used as a fund vehicle, it operates as a tax transparent, flexible partnership for investments. Notably, it has no separate legal personality from its partners, existing purely as a contractual arrangement.

Key characteristics of an SCSp

  • Broad contractual flexibility: most rules are freely determined in the partnership agreement, since the original 1915 law providing few provisions.
  • Tax transparency for corporate income tax and net wealth tax purposes.
  • Internationally recognised structure, based on the Anglo-Saxon limited partnership.
  • Simple set up with limited registration formalities, compared to other business structures.
  • Not subject to CSSF authorization or prudential supervision unless it qualifies as a regulated Alternative Investment Fund (AIF).
  • No minimum capital requirement.
  • Limited partner identities and contributions are not fully disclosed in the Luxembourg Trade and Companies Register (RCS).

What are SCSp used for?

While SCSp structures are most commonly used as fund vehicles, their flexibility allows them to be deployed in a range of investment structures. 

This includes master funds, feeder funds, parallel funds, carry vehicles and special purpose vehicles, depending on the needs of your investment strategy.

Private Equity and Venture Capital

Their flexibility allows fund managers to tailor governance and profit distribution arrangements to meet their investor requirements.

The tax transparency of SCSps ensures that profits are taxed directly at the investor level, avoiding double taxation.

Real Estate investment

SCSps serve as a great way to pool capital from multiple investors to acquire and manage properties and portfolios.

The structure ensures confidentiality and tax efficiency, ideal for holding large commercial properties with diverse investor groups.

Infrastructure and renewable energy projects

The ability of SCSps to accommodate complex ownership and financing structures makes them ideal for large, complex investments. 

They’re increasingly common in sectors like wind farms, solar energy installations, and transportation infrastructure. ​

Co-investment and joint venture vehicles

The flexible SCSp structure enables collaboration between multiple investors or institutions on specific deals or projects. 

The broad scope of the partnership agreement supports governance and profit-sharing arrangements tailored to the participants' objectives.

Special Purpose Vehicles (SPVs)

Can function as SPVs for isolating financial and legal risks associated with particular investments or transactions. 

Common for securitization, structured finance, and other complex financial arrangements where ring-fencing assets and liabilities is necessary. ​

Why should investors consider using an SCSp?

Create the structure they need 

The SCSp offers a high level of contractual flexibility, allowing most rules to be freely determined within the partnership agreement (LPA)

  • Investors can tailor the structure to their specific investment strategies, governance preferences, and relationship with the fund promoter. 
  • Flexibility extends to the management of the SCSp, distribution rules, and the rights and obligations of the partners.

Tax efficiency 

According to the Luxembourg Income Tax Law (LIR), an SCSp is a tax transparent entity for corporate income tax and net wealth tax purposes. 

This means it’s generally not taxed at the SCSp level. Instead, taxation occurs directly at the level of the partners, which can suit non-resident investors.

Broader investment scope 

For unregulated SCSps (not qualifying as AIF), there are no restrictions on who can invest or the types of assets that can be held by the partnership. 

This allows for a wider range of investment strategies and a more diverse pool of potential investors.

Limited disclosure 

Investors, particularly limited partners, can benefit from the confidentiality offered by the SCSp structure. 

The information publicly available on the Luxembourg Trade and Companies Register (RCS) does not include the identity of the limited partners nor details about their contributions.

No minimum capital requirement 

No minimum capital requirement for establishing an SCSp makes it more accessible for a wider range of investors and fund sizes, enabling the creation of diverse investor pools.

Asset protection

Assets held within the SCSp are segregated from the assets of its partners, and are reserved exclusively for the SCSp's creditors, providing a degree of protection against the personal liabilities of the individual partners.

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Luxembourg and its regulatory framework

Over the last decade, Luxembourg has established itself as a key hub for investment funds in Europe and the second-largest investment funds center globally. This provides a dynamic, business-friendly, multilingual, and flexible environment for establishing and growing investment funds.

Key to this growth is the efforts by legislators to create regulatory structures that promote robust investment and growth, including the SCSp. Luxembourg has become a favoured destination for private equity, real estate, infrastructure and debt funds in Europe.

Investors can take advantage of a wide variety of vehicles, legal structures, fund regimes, tax options and regulatory framework to create tailored strategies. 

The function and value of an SCSp relies of certain Luxembourg specific structures and statues that govern their function, namely:

  • Alternative Investment Funds (AIFs): SCSps are commonly, albeit not always, used as AIFs. These are defined as a collective investment undertaking that raises capital from investors, invests in line with a defined investment policy for their benefit and is not authorised as an undertaking for collective investment in transferable securities.
  • Alternative Investment Fund Managers Directive (AIFMD): The AIFMD defines the scope and obligations of managers of AIFs, standing for the Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers, amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010.
  • Alternative Investment Fund Manager (AIFM): If qualifying as an AIF, the AIFMD requires an AIFM to be appointed to ensure regulatory compliance and operational oversight.
  • AIFMD marketing passport: An AIF managed by an authorised AIFM, can qualify for the AIFM marketing passport, allowing AIFM to market their investment products to professional investors across the European Economic Area (EEA).

Why set up an SCSp?

The SCSp offers a sophisticated, flexible, and efficient solution for alternative fund structuring in Luxembourg. Its design closely mirrors the Anglo-Saxon limited partnership model, making it familiar to international fund managers and investors. 

Key advantages include:

  • High Contractual Flexibility: Tailor governance, investor rights, profit-sharing, and operational rules.
  • Tax transparency: Income and gains are taxed only at the investor level.
  • Streamlined setup: Minimal registration formalities, can be formed through a private deed.
  • Versatility in fund roles: Suitable as a master fund, feeder fund, parallel vehicle, or special purpose vehicle.
  • Enhanced confidentiality and broad access: Limited public disclosure of partner identities and no prescribed investor types (unless it qualifies as an AIF).
  • Customizable reporting requirements: Reporting tailored via the LPA.

What are the main alternatives to an SCSp in Luxembourg?

While the SCSp is the newest business structure available for creating fund vehicles, there are other options available for investors.

SCS (Société en Commandite Simple or Limited Partnership)

A partnership with legal personality featuring general partners with unlimited liability and limited partners with liability limited to their contribution.

SCA (Société en Commandite par Actions or Corporate Partnership Limited by Shares)

A corporate entity with legal personality with capital divided into shares. It has general partners with unlimited liability and limited partners (actionnaires) with liability limited to their shares.

SA (Société Anonyme or Public Limited Liability Company)

A corporate entity with legal personality with a minimum capital of EUR 30,000 . All shareholders have limited liability.

FCP (Fonds Commun de Placement or Mutual Fund)

A co-ownership structure of assets without legal personality, managed by a management company. It has no minimum capital requirement and unitholders with limited liability.

Comparison table for Luxembourg SCSp alternatives

Feature SCSp SCS SCA SA FCP
Legal Form Partnership Partnership Hybrid Corporate Contractual
Separate Legal Personality No Yes Yes Yes No
Governance GP/LP Agreement GP/LP Agreement Board of Directors Board of Directors Management Company
Investor Liability Limited (GP unlimited) Limited (GP unlimited) Limited Limited Limited
Minimum Capital None None €30,000 €30,000 None
Tax Transparency Transparent Transparent Opaque Opaque Transparent
Tax Treaty Access Via Partners Via Partners Direct Direct None
Investor Powers Per Partnership Agreement Per Partnership Agreement Shareholders' meeting Shareholders' meeting Management regulations
Publication Requirements Minimal Limited Extensive Extensive Extensive
Annual Accounts Filing No Yes Yes Yes Yes
Audit Requirements Depends on regulatory regime Depends on regulatory regime Depends on regulatory regime Depends on regulatory regime Yes

What are the main alternatives to an SCSp internationally?

Luxembourg is not the only country to offer attractive business and tax arrangements with an eye to attracting international investment. Let’s look at alternatives in other markets and how they compare.

Delaware Limited Partnership (Delaware LP)

The Delaware LP is a widely-used investment vehicle in the United States, based on the state's particular local regulations, offering flexibility, tax transparency, and ease of formation. Popular among private equity and venture capital managers, it provides a familiar regulatory framework with minimal ongoing compliance obligations.

UK Limited Partnership

The UK LLP is a corporate investment vehicle in the UK, offering separate legal personality and full member liability protection. It provides governance flexibility, as all members may participate in management without losing limited liability status. It's tax-transparent, simplifying domestic investor taxation. However, its UK-only regulatory status may restrict EU investor access compared to an investment vehicle in Luxembourg.

France FPCI

The French Fonds Professionnel de Capital Investissement (FPCI) is an institutional investment vehicle in France, typically structured as tax-transparent or tax-exempt. It’s suitable for private equity and venture capital strategies, offering regulatory protection and favorable taxation for institutional investors. 

Singapore Variable Capital Company (VCC)

The Singapore VCC is a corporate investment vehicle in Singapore, designed for flexibility in fund structuring, including umbrella and sub-fund arrangements. With advantageous tax exemptions and access to Singapore’s extensive tax treaty network, it appeals especially to Asia-focused fund managers.

Cayman Islands Exempted Limited Partnership (ELP)

The Cayman Islands ELP is a tax-neutral, flexible, and lightly regulated investment vehicle in the Cayman Islands, popular globally for hedge funds, private equity, and venture capital. Its straightforward compliance and tax efficiency make it attractive for international investors, particularly from the US and Asia.

German KG (Investment KG)

The German KG, often structured as GmbH & Co. KG, is a limited partnership commonly used as an investment vehicle in Germany for institutional investors. It offers tax transparency or exemption, facilitating tax-efficient fund structuring. Although typically requiring a corporate GP (GmbH), the structure supports alternative investments effectively under German regulatory and tax frameworks.

Comparison table for international SCSp alternatives

Feature Luxembourg SCSp Delaware LP (US) UK LLP France FPCI Singapore VCC Cayman Islands ELP German KG (InvKG)
Legal Form Partnership, no legal personality Partnership, distinct legal entity LLP, separate legal personality Fund (usually FCP) Corporate entity Partnership, no legal personality Partnership, legal personality
Management GP/Manager via LPA GP LLP Member or designated Manager AMF-authorized management company Board & licensed fund manager GP GP
Regulation AIFMD (if AIF) Minimal UK FCA (AIF regime) AMF regulated MAS regulated Light CIMA oversight KAGB/AIFMD (if AIF)
Tax Transparent Transparent Transparent Transparent or exempt Exempt No local taxes Transparent
Treaty Access No No No Limited Yes, for corporate schemes No No
Typical Uses PE/VC, real estate, private debt PE/VC, private funds UK JVs, private funds French PE/VC Global/APAC private funds Offshore private funds PE/VC, infrastructure debt
Key Strength EU passport via AIFM Flexibility, global dominance UK domestic flexibility French institutional alignment Umbrella structure Cost-efficient, flexible EU passport via AIFM

What are the different types of SCSp?

The legal structure of an SCSp can be applied to various types of investment funds or regulatory regimes, providing specific advantages to suit the strategy in mind. 

The regulatory landscape differentiates SCSps primarily into unregulated and regulated types. If an SCSp operates as an AIF above the AIFMD threshold (above €100M with leverage or €500M unleveraged, closed-ended), it is legally required to appoint an authorized AIFM

This AIFM becomes responsible for key management functions like portfolio and risk management, as well as ensuring compliance with the AIFM Law. 

An SCSp's ability to access the European marketing passport to market to professional investors across the EEA is generally dependent on it being managed by a fully authorized AIFM under the AIFMD regime.

Depending on the structure, they may or may not be subject to supervision by the Commission de Surveillance du Secteur Financier (CSSF). 

Unregulated SCSp

These highly flexible investment vehicles operate without direct CSSF supervision, making them attractive for private equity, real estate, and infrastructure. While they have maximum contractual freedom, their AIFM will be regulated if the SCSp qualifies as an AIF and exceeds AIFMD thresholds.

Reserved Alternative Investment Fund (RAIF)

Operating without direct CSSF supervision but indirectly supervised by its EU-authorized AIFM, a RAIF must qualify as an AIF and is designed for well-informed investors, with diversification requirements unless focused on risk capital.

Specialized Investment Fund (SIF)

A regulated fund directly supervised by the CSSF that requires CSSF approval before launch, the SIF is reserved for well-informed investors and is subject to diversification rules, offering the possibility of being an umbrella fund.

Investment Company in Risk Capital (SICAR)

Also allowing for an umbrella structure and requiring direct CSSF supervision and approval, a SICAR is tailored for well-informed investors with a mandate to invest in risk capital and benefits from no diversification requirements.

Comparison table of the different SCSp types

SCSp Type Key Features Supervision Investor Eligibility Diversification Umbrella Fund Investment Focus AIFMD Applicability
Unregulated SCSp Maximum flexibility and contractual freedom.

Often used for private equity, real estate, and infrastructure.
No direct CSSF supervision if an AIF, must be managed by an AIFM. No defined type of investors (but restrictions apply if qualifying as an AIF). No diversification requirements. SCSp itself can be an umbrella. Broad range, including private equity, real estate, infrastructure. May qualify as AIF; authorized AIFM required above thresholds.
Reserved Alternative Investment Fund (RAIF) Not directly supervised; indirectly via its AIFM; must qualify as an AIF. Indirectly supervised via EU-authorised AIFM. Reserved for "well-informed investors". Subject to diversification requirements (unless risk capital). Can be an umbrella fund with multiple compartments. Suitable for all asset classes. Qualifies as AIF; must appoint EU-authorized AIFM.
Specialized Investment Fund (SIF) Directly supervised by CSSF; requires CSSF approval before launch. Directly supervised by CSSF. Reserved for "well-informed investors". Subject to diversification requirements. Can be an umbrella fund with multiple compartments. Suitable for all asset classes. Qualifies as AIF; authorized AIFM required above thresholds.
Investment Company in Risk Capital (SICAR) Directly supervised by CSSF; requires CSSF approval before launch. Directly supervised by CSSF. Reserved for "well-informed investors". No diversification requirements. Can be an umbrella fund. Must invest in risk capital assets. Qualifies as AIF; authorized AIFM required above thresholds.

How an SCSp Works

Legal framework of an SCSp

The SCSp’s lack of legal personality is one of its defining features. This means the partnership itself is not a legal entity distinct from its partners. 

SCSps are primarily subject to the law of 10 August 1915 on commercial companies. Additionally, if the SCSp qualifies as an AIF, it will also be subject to the 2013 AIFM Law

In certain cases, an SCSp may also be subject to specific product regimes if used for regulated fund vehicles.

Key legal characteristics include:

  • The legal regime for SCSps has minimal compulsory provisions – the Limited Partnership Agreement (LPA) is the central document that governs most aspects of the SCSp's operation.
  • The SCSp is formed by a partnership agreement (LPA), which can be executed as a private deed or a public deed
  • While a notary is not legally required for the LPA, certain information, as outlined in an extract of the deed, must be filed with the Luxembourg Trade and Companies Register (RCS).
  • SCSps are not subject to any minimum capital requirements.
  • Unregulated SCSps are generally not subject to CSSF authorization or prudential supervision.
  • Its duration can be limited or unlimited.

Formation and legal status of an SCSp

An SCSp is formed by at least one general partner (GP) and one limited partner (LP) under a limited partnership agreement (LPA). 

The GP has unlimited joint liability for the partnership’s debts, while LPs’ liability is capped at their committed contributions.

The SCSp’s lack of legal personality means the partnership itself is not a legal entity distinct from its partners. The GP (or appointed manager) acts on behalf of the partnership in dealings with third parties.

Legal constitution of an SCSp

Key legal considerations to remember include:

  • Requires a Limited Partnership Agreement (LPA), which can be a private deed.
  • Only an extract of the LPA is filed with the RCS within one month.
  • The filed extract has limited information, keeping LP identities confidential.
  • There is no minimum capital requirement.
  • Contributions can be in cash, kind, or services.
  • Contributions don't need to be fully paid at inception.
  • Requires at least one GP (unlimited liability) and one LP (limited liability).
  • The SCSp must have a unique company name and have a registered office at its head office.

Comparison table between the SCSp framework and other legal structures

Feature SCS SCSp SCA
Legal Personality Yes No Yes
Governing Document Limited Partnership Agreement Limited Partnership Agreement Articles of Association
Constitution Private instrument Private instrument Notarial deed
Publication Extract published Extract published Deed published
Governance GP/LP structure GP/LP structure Board of directors
Minimum Capital No No €30,000
Filing of Annual Accounts Yes No* Yes
Tax Status Transparent Transparent Opaque

When is an SCSp considered an AIF subject to AIFMD?

An SCSp is an AIF if it is a collective undertaking that raises capital from multiple investors to invest according to a defined policy for their benefit. Most PE/buyout funds meet this definition. AIFs with assets above €100M (leveraged) or €500M (unleveraged, closed-ended) require a fully authorized AIFM.

Advantages of an SCSp

Highly flexible and customizable fund structuring

Enables bespoke governance, management, and distribution arrangements that can be tailored to a wide range of alternative investment strategies (e.g., umbrella, master-feeder, co-investment structures).

Tax efficiency and favorable distribution treatment

Provides tax transparency, ensuring income and gains are taxed at the investor level, and avoids Luxembourg withholding tax on distributions, potentially improving net returns.

Streamlined setup with reduced regulatory burdens

Facilitates efficient, straightforward establishment with minimal reporting requirements for unregulated SCSp vehicles, thereby accelerating time to market and lowering operational costs.

Enhanced market access and confidentiality

The AIFMD passport enables EU-wide marketing while preserving investor privacy by limiting public disclosure of partner identities and contributions.

Customizable contractual provisions and risk protection 

Allows precise tailoring of distribution waterfalls, LP information rights, and default provisions, and protects limited partners by eliminating direct creditor actions.

Disadvantages of an SCSp

Dependence on contractual arrangements and lack of legal personality 

While the LPA offers a high degree of flexibility, the unlimited liability of a General Partner requires carefully drafted LPAs to manage operational risks.

International tax and regulatory complexities

Even though Luxembourg enjoys extensive tax treaty agreements, the SCSp will not benefit from such treaties. Investors will need to rely on treaties applicable in their own countries of residence.

Limited public disclosure affecting transparency

Restricted public availability of partner identities and contribution details may deter investors who prefer greater transparency for due diligence purposes.

Recap table of the advantages and disadvantages of SCSp

Advantages Disadvantages
Flexible structure: Bespoke governance and distribution arrangements Lacks legal personality: Requires GP with unlimited liability
Tax efficient: Transparent taxation and no Luxembourg withholding tax Tax treaty limitations: Cannot directly access Luxembourg tax treaties
Light regulation: Minimal reporting for unregulated vehicles Reduced transparency: Limited public disclosure may deter some investors
Customizable provisions: Tailored distribution waterfalls and LP protections

Tax implications of an SCSp

SCSp structures are a popular choice for fund vehicles due to their tax advantages – here’s the key details you need to know (but remember that you should always consult a tax advisor to obtain tax advice).

Direct taxation on SCSp revenue

The SCSp is deemed fiscally transparent for Luxembourg direct tax purposes. This means that it’s:

  • Not subject to Luxembourg corporate income tax
  • Not subject to municipal business tax (provided it’s not deemed commercial)
  • Not subject to net wealth tax
  • No withholding tax on distributions to partners

Note, the partners are still taxed in their own jurisdictions on their share of partnership income.

Commercial status and municipal business tax of an SCSp

Municipal business tax is set by communes in Luxembourg, levied exclusively on the profits of commercial enterprises. The municipal business tax for Luxembourg City is 6.75%.

An SCSp can be deemed “commercial” and subject to municipal business tax (MBT) in two scenarios:

  1. If the GP is a Luxembourg company holding 5% or more of the partnership interests.
  2. If the SCSp itself conducts a commercial activity.

An SCSp can avoid MBT by:

  • If the GP is a Luxembourg-based entity, keeping their interest below 5% (typically around 1%).
  • Ensuring activities qualify as asset management rather than commercial trading.

Partner taxation

The tax transparency of the SCSp structure – and lack of identity separate from partners – means that taxation primarily falls on the individuals and organisations involved, according to their location and status.

  • Resident partners: Include their share of partnership income in their tax base.
  • Non-resident partners: Generally not taxed in Luxembourg except on Luxembourg-source income (e.g., Luxembourg real estate).
  • Treaty benefits: The SCSp cannot claim tax treaty benefits directly; partners must rely on their own status.

VAT considerations in an SCSp

  • Management services provided to an SCSp qualifying as an AIF are exempt from Luxembourg VAT - this exemption is not available if the SCSp does not qualify as an AIF. 
  • VAT liability is not automatically based on the SCSp's legal form. Instead, whether an SCSp is subject to VAT depends directly on the nature of the economic activities it undertakes.
  • The SCSp itself may need to register for VAT if engaging in VAT-eligible activities, but most investment fund SCSps have no VAT activities.
  • Other services provided to or by the SCSp, besides the core fund management, might still be subject to VAT.
  • Regarding the management company managing an SCSp investment fund, the company is generally considered a taxable person providing services to the fund. The VAT treatment of their fees (e.g., management fees) will be considered in light of VAT exemptions for managing certain collective investment undertakings.

Anti-hybrid Rules

Hybrid mismatches arise from differences in the tax treatment of an entity or financial instrument across jurisdictions. 

For example, an investment vehicle may be treated as tax-transparent (flow-through) in Luxembourg, while in another jurisdiction, the same SCSp might be viewed as a taxable entity, resulting in double taxation of the income.

Luxembourg’s reverse hybrid rule came into effect in 2022,  following the introduction of ATAD II in 2019, targeting entities that are tax transparent in Luxembourg but non-transparent for their investors, aiming to tax income not otherwise taxed in the investors' jurisdictions.

The Circular of 9 June 2023 provides guidance on the rule's application, clarifying that these rules won’t apply when investors are tax-exempt or based in zero-tax jurisdictions.

Tax treatment comparison table of alternatives to an SCSp

Tax Aspect SCSp SCS SCA
Legal Personality No Yes Yes
Corporate Income Tax (CIT) No No Yes (24.94%)*
Municipal Business Tax (MBT) No (if not commercial)** No (if not commercial)** Yes (6.75% in Luxembourg City)*
Net Wealth Tax (NWT) No No Yes*
Withholding Tax on Distributions No No Yes (15%)*
Subscription Tax No No No
VAT on Management Services Exempt if AIF Exempt if AIF Exempt if AIF
Access to Tax Treaties No No Yes
Tax Transparency Yes Yes No
Investor Taxation In investor's jurisdiction on their share In investor's jurisdiction on their share Dividend taxation in investor's jurisdiction

**SCA tax rates shown are standard rates. The SCA could qualify for special regimes with different tax treatment.

Understanding SCSp Governance 

As mentioned, the SCSp is characterised by a flexible management structure outlined primarily in its Limited Partnership Agreement (LPA). Unlike corporate entities with a board of directors, the management authority of an SCSp is typically vested in one or more managers who may be:

  • The general partner(s) (GP),
  • Third-party managers specifically designated within the LPA,
  • Potentially, a management company, although this is less common for unregulated SCSps but possible, especially if the SCSp is operating as a regulated AIF.

The role of a General Partner in an SCSp

The general partner (GP) holds a critical position within the SCSp structure, primarily due to their liability and control:

  • The GP bears unlimited and joint and several liability for all the obligations of the partnership. This means that the personal assets of the GP are at risk for the debts of the SCSp.
  • The GP has the power to bind the partnership. This authority allows them to enter into contracts and take actions on behalf of the SCSp.
  • The GP can be a corporate entity, and in practice, it is often established as a Luxembourg limited liability company (SARL) or another suitable legal form.
  • The GP can delegate management functions to other managers or service providers while typically retaining ultimate oversight responsibility for the SCSp's operations.

In practice, the GP entity is often established with minimal capital to limit the potential financial exposure associated with the unlimited liability.

Manager authority and third-party protection in an SCSp

The authority of the SCSp's managers, whether the GP or a third party, and the protection afforded to third parties dealing with the SCSp are important aspects of its operational framework:

Aspect Manager Authority and Third-Party Protection
Manager Binding Authority Managers have authority to bind the partnership even if acting beyond the stated purpose of the SCSp (its “objet social”), provided that third parties dealing with the manager were unaware of any limitations on their power (Law of 1915 on commercial companies).
Burden of Proof In this scenario, the SCSp would need to prove the third party's awareness of the exceeded authority to avoid being bound.
Contractual Limitations Contractually agreed limits on a manager's powers as defined in the LPA are generally not enforceable against third parties unless these limitations have been properly published with the RCS. This protects third parties who are not privy to the internal agreements of the partnership.
Fiduciary Duties If someone other than the GP acts as a manager of the SCSp, the 1915 Companies Law applies the same fiduciary duties and liabilities as those applicable to company directors to ensure a level of responsibility and accountability for all individuals managing the SCSp.
Day-to-Day Operations Day-to-day decisions and the representation of the partnership vis-à-vis third parties are carried out by the GP or the designated manager(s), while the LPA will typically outline the specific responsibilities and authorities of the managing parties.

Limited Partner role for an SCSp

The limited partners (LPs) in an SCSp are primarily passive investors whose liability is legally circumscribed. Their key characteristics and limitations include:

Aspect Limited Partner Rights and Restrictions
Limited Liability LPs' liability for the obligations of the SCSp is limited to the amount of their respective contributions or commitments to the partnership. This protection from full personal liability is a defining feature of their role.
Restriction on External Management A major constraint on LPs is that they are prohibited from carrying out any act of management vis-à-vis third parties, meaning, they cannot represent or bind the SCSp in external dealings.
Advisory Committee Participation LPs can serve on advisory committees that provide guidance to the GP or managers without jeopardizing their limited liability protection.
Contractual Rights and Internal Oversight LPs retain the right to exercise their contractual rights as defined in the LPA and can engage in internal oversight activities within the partnership without assuming management responsibilities.
Confidentiality The identity and contributions of LPs generally remain confidential. Their names and the specifics of their stakes are not publicly disclosed on the Luxembourg Trade and Companies Register.
Asset Segregation The assets of the SCSp are legally segregated from the LPs' own personal assets, protecting LP assets from SCSp creditors beyond their committed capital.

Safe Harbor activities for LPs in an SCSp

Luxembourg law outlines certain safe harbor activities that limited partners can undertake without being deemed to be involved in external management and risking their limited liability. These include:

  • Exercise of partner prerogatives such as voting rights and participating in partners' meetings.
  • Giving advice and providing counsel to the partnership, its affiliated entities, or its managers.
  • Providing loans, guarantees, or security to the partnership or its affiliated entities.
  • Engaging in control and supervision acts of the partnership's activities, such as reviewing financial information.
  • Acting as a director or employee of the general partner.
  • Participating in internal decision-making processes or granting authorisations to managers for actions exceeding their defined powers as stipulated in the LPA.

Management liability in an SCSp

If a limited partner oversteps their passive role and engages in management acts toward third parties, it can have significant consequences for their liability.

  • An isolated incident of an LP engaging in an external management act may result in the LP being held indefinitely and jointly liable only for that specific transaction with the third party involved.
  • Regular or habitual involvement of an LP in external management acts can lead to the LP being held indefinitely and jointly liable for all of the partnership's obligations, even those in which they were not directly involved.

Decision-making and voting in an SCSp

The role of LPs in the decision-making processes of the SCSp is primarily governed by the LPA.

Managers (either the GP or designated third parties) make day-to-day operational decisions as outlined in the LPA.

The LPA can reserve certain key decisions or specific categories of actions for the approval of the limited partners.

By default, voting rights among the partners correlate with each partner’s proportion of the partnership interests held, unless the LPA explicitly stipulates an alternative voting mechanism (e.g., per head voting, varied voting rights for different interests).

There is no statutory requirement to hold annual general meetings (AGMs) for an SCSp; the LPA dictates the necessity and procedures for partner meetings or written resolutions.

The LPA can define different majority thresholds required for various key decisions, providing extra flexibility in governance.

Advisory committee for an SCSp

Most SCSps establish an advisory committee composed of representatives from the limited partners (LPs)

While not a statutory requirement, these committees serve as a mechanism for LPs to provide input and oversight without engaging in acts of external management that could jeopardize their limited liability. 

Typical functions of an advisory committee may include:

  • Reviewing and approving potential conflicts of interest that may arise during the SCSp's operations.
  • Consulting on valuation methodologies used for the SCSp's assets.
  • Approving certain types of investments or significant deviations from the SCSp's defined investment policy as outlined in the Limited Partnership Agreement (LPA).
  • Reviewing the SCSp's expenses and ensuring they align with the terms of the LPA.

Serving on such an advisory committee falls within the safe harbor provisions for LPs as their role is generally considered to be advisory and internal to the partnership, not constituting external management with respect to third parties.

Fiduciary duties in an SCSp

General partners (GPs) and managers of an SCSp owe fiduciary duties to the partnership. These duties generally require them to act in good faith and in the best interests of the SCSp and its partners.

If the SCSp is managed by an authorized (or registered) AIFM, then additional regulatory duties apply under the AIFMD. 

These duties encompass aspects such as risk management, valuation, and transparency.

The LPA often clarifies the scope and limitations of these fiduciary duties, providing a contractual framework for the responsibilities of the GPs and managers.

Luxembourg courts will generally enforce the contractual arrangements outlined in the LPA but may look to general partnership principles and Luxembourg's 1915 Law on commercial companies in case of disputes or matters not explicitly covered in the agreement.

Governance documentation for an SCSp

The governance of a Luxembourg SCSp is primarily defined by the following key documents:

Limited Partnership Agreement (LPA)

This is the primary governance document that forms the SCSp. 

It is a contract between the general partner(s) and the limited partner(s) and offers a high level of contractual flexibility

The LPA governs crucial aspects such as the SCSp's duration, purpose, capital contributions, management structure, allocation of profits and losses, voting rights, and the terms and conditions for the transfer of partnership interests.

Side letters

These are separate, confidential agreements entered into between the GP (on behalf of the SCSp) and specific investors (LPs)

Side letters typically address particular needs or obligations of those investors, such as specific reporting requirements, most favored nation (MFN) clauses, or variations to the terms of the LPA. However, side letters must be consistent with the main provisions of the LPA and cannot contradict them.

Advisory Committee Terms of Reference

If an advisory committee is established, its mandate, composition, and operating procedures may be outlined in a separate document referred to as the terms of reference. This document clarifies the committee's role and its interaction with the GP and the LPs.

Management or Investment Advisory Agreements

If the management of the SCSp or the investment advisory functions are delegated to a third-party manager or investment advisor (separate from the GP), the terms of their appointment, responsibilities, and fees are detailed in a separate management agreement or investment advisory agreement. These agreements should align with the provisions of the LPA.

How to set up an SCSp

The process of establishing an SCSp is designed to be straightforward and simple to set up, but still requires careful attention to compliance and governance, particularly when it comes to creating your LPA. Decisions you make here will affect the future of your fund, so it pays to get it right.

Roundtable handles all SPV complexity—from setup and compliance to investor onboarding across Europe and beyond. You focus on deals, we handle the rest. See how it works →

Preparation 

  • Define your strategy: Pinpoint your investment strategy and establish clear economic terms that align with the goal of your fund.
  • Select your regulatory regime: Decide whether you will go with an unregulated structure, RAIF, SIF, etc.
  • Draft the LPA: Prepare a comprehensive Limited Partnership Agreement that sets the foundation.
  • Establish the GP: Identify and set up your General Partner entity.
  • Appoint service providers: Bring on board key players such as an AIFM (if needed), depositary (if needed), auditor (if needed) and administrator.

Formation 

  • Execute the LPA: Sign the Limited Partnership Agreement as a private deed.
  • File with the RCS: Submit an extract of the LPA to the Luxembourg Trade and Companies Register within one month.
  • Register officially: Obtain your registration number and file at the Register of Beneficial Owners (RBE).

Required information

 The extract submitted must include:

  • The SCSp’s name and purpose,
  • Duration (if the SCSp is set for a limited term),
  • The registered office address,
  • Details of the general partner(s): name, profession, and address,
  • Management rules outlining who can bind the partnership.

Costs and timeframe

  • Fees: You will need to budget for registration fees, publication costs, and professional advisory fees (legal, tax, etc.) to set up the entity.
  • Timeline: Typically, an unregulated SCSp can be set up in 1–2 weeks.

Regulatory considerations

  • For RAIFs: No prior approval is needed, but you must notify the CSSF after formation.
  • For SIF/SICAR: Expect a longer process, as CSSF approval is required before launch (usually 4–6 months).

AML/KYC 

  • Ensure full compliance with Luxembourg’s AML/KYC requirements.
  • Partners must provide necessary identification documents and source-of-funds information.
  • Register with the Register of Beneficial Owners (RBE) as part of the process.

What are the fees involved for an SCSp?

Setup costs

  • Legal fees: Drafting the Limited Partnership Agreement (LPA) and establishing the General Partner (GP) entity.
  • Registration fees: Costs for filing with the Luxembourg Trade and Companies Register (RCS), including publication fees.
  • Initial regulatory filings: Fees associated with any required regulatory filings (e.g., CSSF authorization if the SCSp qualifies as an AIF above threshold).

Ongoing costs

  • GP maintenance: Accounting and annual filing fees for the GP entity.
  • Fund administration: Expenses for NAV calculations, investor relations, and other administrative tasks.
  • AIFM fees: Ongoing management fees if a third-party authorized AIFM is required (applicable for regulated SCSp structures).
  • Depositary fees: Charges for safeguarding assets if the SCSp holds securities.
  • Audit fees: Costs for financial audits when regulatory thresholds or investor requirements mandate them.
  • Ongoing legal advisory: Continuous legal support for regulatory compliance and transaction-specific matters.

Note: For a small SCSp RAIF, service provider costs are estimated at approximately €100k–€200k annually, while unregulated structures with fewer investors typically incur lower ongoing fees.

How to manage an SCSp

Key service providers for an SCSp

General Partner (GP)

The SCSp requires at least one General Partner who assumes unlimited, joint liability for the SCSp’s obligations and ensures compliance with the Limited Partnership Agreement (LPA).

Alternative Investment Fund Manager (AIFM)

When the SCSp operates as an Alternative Investment Fund (AIF) above certain thresholds, an authorized AIFM is appointed to manage the portfolio and oversee risk management.

Depositary

For SCSp structures qualifying as AIFs, a depositary is engaged to safeguard assets and monitor the activities of the AIFM.

Auditor

Although the SCSp is not required to file annual financial statements, an auditor may be appointed, especially in regulated setups or at investor request, to review financial records.

Legal and Tax Advisors

Lawyers and tax experts are integral to drafting the LPA, advising on regulatory compliance, and handling tax matters.

Accounting Service Providers

Even without a filing obligation for annual accounts, accounting providers are often employed to manage bookkeeping and maintain accurate financial records.

Key documentation for an SCSp

1. Accounting and financial statements

  • Unregulated SCSp: Minimal reporting requirements if below certain thresholds.
  • AIFs: Expect more detailed, comprehensive reports.
  • Regulated Vehicles (RAIF, SIF): Mandatory reporting requirements to consider.

2. Tax filings

  • Basic Returns: Often nil filings or simply partnership information returns.
  • For RAIFs/SIFs: You might also deal with a small subscription tax (0.01% of NAV) and VAT registration if applicable.

3. Regulatory reporting

  • For AIFs: Prepare Annex IV reports and any other notifications as required by regulators.
  • International Standards: Ensure FATCA/CRS reporting is handled correctly (if SCSp qualifies as a (F)FI).

4. Governance activities

  • Investor Communications: Regular annual reports, capital account statements, capital call notices, distribution statements, and investment reports keep your investors informed.
  • Meetings: Hold GP board meetings, advisory committee sessions (as outlined in the LPA), and partner meetings as needed.

5. Domiciliation and administration

  • Registered Office: Maintain a registered office in Luxembourg with proper documentation retention.
  • Secretarial Support: Efficient mail handling and corporate secretarial support to manage communication and compliance.

How to dissolve a SCSp

Dissolving a Luxembourg Special Limited Partnership (SCSp) is a structured process defined by its partnership agreement (LPA) and Luxembourg law. 

Entering liquidation

An extract of the deed, detailing the liquidation terms and liquidators' powers, must be filed with the Luxembourg Trade and Companies Register (RCS). For voluntary dissolutions, administrative certificates (including one from the Joint Social Security Centre) are required.

Appointment of liquidators

The LPA outlines how liquidators are selected and their authority. If the SCSp qualifies as an AIF, the CSSF may need to approve the liquidators to ensure everything runs smoothly.

Settling debts and distributing assets

Liquidators are responsible for selling assets, settling debts, and then distributing any remaining funds to partners according to the rules in the LPA. All documentation during this phase should clearly state that the SCSp is “in liquidation.”

Final closure

After all assets are distributed and debts are settled, the closure of the liquidation must be recorded in the RCS. This public record notifies all stakeholders that the SCSp has officially ceased operations.

Note: Every SCSp is unique. Always review your LPA for specific dissolution clauses and consult with professional advisers to ensure compliance with all legal requirements.

SCSp use cases

Private Equity

The SCSp is ideal for private equity and venture capital strategies where long-term investments and flexible profit-sharing are paramount.

  • Long-term structure: Closed-end structure aligns with typical 8–10 year investment horizons.
  • Capital efficiency: Capital call mechanism enables drawdowns as investments are executed.
  • Flexible profit sharing: Customizable carried interest and complex waterfall arrangements (hurdle rates, catch-up provisions).
  • Operational simplicity: Fewer formalities compared to corporate structures reduce administrative burdens.

Common applications:
Buyout funds, growth equity funds, venture capital funds, secondary funds, fund-of-funds, and single-deal co-investment vehicles.

Real Estate investment

For real estate strategies, the SCSp offers tax-efficient handling of property expenses and adaptable profit allocation.

  • Expense management: Pass-through of depreciation and property-related costs.
  • Custom profit allocation: Flexibility to assign profits to various investor classes.
  • Reinvestment advantages: Reinvestment of proceeds occurs without entity-level taxation.
  • Structural flexibility: Options for compartmentalizing different property types or geographies.

Common Applications:
Closed-end real estate funds, value-add/opportunistic strategies, club deals, joint ventures, development funds, and core-plus strategies.

Private Debt & Credit

SCSp is well-suited for private debt and credit strategies, offering efficient income distribution and risk segmentation.

  • Direct income flow: Interest income is passed directly to investors, bypassing entity-level taxation.
  • Regular distributions: Structured cash distributions enhance liquidity for investors.
  • Risk segmentation: Compartmentalization allows tailoring of credit risk profiles.
  • Collateral management: Easy to manage security packages and collateral within the structure.

Common applications:
Direct lending funds, mezzanine debt funds, distressed debt investments, structured credit funds, and credit opportunity funds.

Infrastructure

The SCSp is particularly effective for infrastructure investments that require long-term stability and structured yield distribution.

  • Long-term alignment: Closed-end structure suits extended investment horizons typical in infrastructure projects.
  • Yield distribution: Efficient mechanisms to distribute stable yield components.
  • Complex governance: Accommodates varied investor classes and complex public-private partnership models.

Common applications:
Energy, transport, social, and digital infrastructure funds, as well as public-private partnership vehicles.

Hedge funds & liquid strategies

While less common, the SCSp can support niche hedge fund strategies and hybrid models where liquidity is limited.

  • Specialized structures: Suitable for strategies that combine elements of hedge and private equity funds.
  • Administrative considerations: Recognizes potential challenges in managing high transaction volumes and NAV calculations.
  • Hybrid approaches: Viable for closed-end liquid alternatives and fund-of-hedge-funds vehicles.

Potential applications:
Closed-end liquid alternative funds, hybrid hedge/private equity strategies, credit hedge funds with limited liquidity, and fund-of-hedge-funds vehicles.

Strategy compatibility overview table

Investment Strategy SCSp Suitability Key Considerations
Private Equity/VC ★★★★★ Perfect fit for closed-end, carried interest structures
Real Estate ★★★★☆ Excellent for closed-end; alternatives better for open-ended core
Private Debt ★★★★☆ Well-suited, especially for yield-focused strategies
Infrastructure ★★★★☆ Excellent for long-term partnerships with yield components
Hedge Funds ★★★☆☆ Workable but not optimal; better for limited liquidity strategies
Open-Ended Mutual Funds ★☆☆☆☆ Not recommended; corporate structures better suited
ETFs ☆☆☆☆☆ Not suitable; requires corporate structure

Why use an SCSp for SPV

In the broader context of alternative fund structuring, the SCSp not only delivers general advantages, such as flexibility, tax transparency, and streamlined setup, but also offers specific benefits when employed as a Special Purpose Vehicle (SPV).

Benefit Nature Impact
Risk Isolation Ring-fencing assets and liabilities through a non-entity structure Protects overall portfolio from specific deal risks
Tailored Structuring Customizable LPA provisions for management, distribution, etc. Aligns SPV operations precisely with transaction needs
Efficient Setup No minimum capital and minimal formalities Enables rapid deployment and cost savings
Enhanced Confidentiality Limited public disclosure of partner details Maintains privacy for sensitive or competitive transactions
Broad Flexibility No restrictions on assets or investors Accommodates a wide range of investment scenarios

Setting up an SCSp with Roundtable

With Roundtable’s, you can easily set up, structure and manage an SCSp for club deals or venture capital funds. 

Our white‑glove process handles everything, from setting up in Luxembourg, creating bank accounts, onboarding investors with full KYC, to managing signing processes and fund collection.

  • Streamlined regulatory & compliance assistance: We help you navigate Luxembourg’s regulatory landscape, including AIFMD requirements, simplifying registration and reducing admin.
  • Operational & administrative efficiency: With full support for investor onboarding, KYC processes, capital calls, and multi-currency transactions, we handle the details so you can focus on deal-making.
  • Enhanced confidentiality & global access: Our platform maintains investor privacy, opening doors to global capital and investment opportunities.
  • Cost-effective solutions: By minimizing legal fees and administrative costs, we ensure a rapid, affordable SCSp setup that meets your strategic needs.

Talk to an expert about setting up your SCSp today.

SCSp best practices

Optimize for structure

Keep GP’s stake below 5%

If a Luxembourg-based General Partner (GP) holds more than 5% of the SCSp’s interests and the SCSp carries on any “commercial” activities, the partnership could face municipal business tax. Structuring the GP entity with a lower stake (often 1%) helps avoid this exposure.

Ensure adequate substance in Luxembourg

When the GP acts as the Alternative Investment Fund Manager (AIFM), it must demonstrate sufficient local presence—personnel, decision-making, and infrastructure—to meet regulatory expectations under the AIFM Law.

Set a clear LPA foundation

Define precise distribution waterfalls

Clearly outline how profits, capital returns, and carried interest (if any) are allocated among partners.

Include comprehensive governance provisions

Specify roles and responsibilities of the GP and limited partners (LPs), decision-making procedures, and any advisory committees.

Set LP information rights and reporting standards

Indicate what data LPs can access (e.g., financials, capital calls) and how frequently.

Outline default and excuse provisions

Detail what happens if a partner fails to meet capital calls, or if an LP opts out of certain investments.

Tax structuring

Stay within “investment” activities

Unregulated SCSps remain tax-transparent if they avoid commercial activities. The LPA should define the SCSp’s scope to prevent unintended commercial classification.

Maintain proper documentation

Accurate bookkeeping is essential, as the SCSp’s profits and losses flow through to the partners for taxation in their respective jurisdictions.

Plan ahead for hybrid entity issues

Some jurisdictions  may treat the SCSp differently for tax purposes. Anticipate reverse-hybrid rules to avoid unexpected liabilities.

Use holding companies if treaty access is needed 

Because SCSps generally do not access Luxembourg’s double-tax treaties directly, consider interposing corporate vehicles to benefit from treaty networks.

Plan for compliance 

Confirm AIF status

If the SCSp is an Alternative Investment Fund, an authorized or registered (depending on size) AIFM must be appointed.

Implement robust AML/KYC & regulatory compliance procedures

Ensure you meet Luxembourg’s Anti-Money Laundering and Know Your Customer requirements.

In addition, if the SCSp can only onboard certain types of investors, ensure to keep a track of each investor’s status:

  • Maintain registers and investor eligibility: Keep a partner register and, if relevant, records showing all investors meet “well-informed” criteria for RAIFs or SIFs.
  • Leverage the AIFMD passport correctly:  If you plan to market across the EU, follow the AIFMD passport or private placement regimes to avoid regulatory breaches.

SCSp pitfalls

Limited Partner involvement

Overstepping safe harbors

LPs who engage in external management activities risk losing their limited liability shield. Keep advisory roles clearly defined and documented.

Lack of clarity on advisory vs. management

If LPs give advice, record it in writing (e.g., meeting minutes) to show it does not equate to external management.

Tax classification

Improper GP ownership

A GP interest above 5%, combined with non-investment activities, may trigger municipal business tax.

Ignoring hybrid mismatches

Failing to address reverse-hybrid or transparency mismatches can lead to double taxation or other inefficiencies.

Unintended commercial status

Engaging in what authorities view as commercial operations could jeopardize tax transparency.

Regulatory risks

Marketing without AIFMD compliance

Offering SCSp (that qualify as an AIF) interests  to EU investors without a passport or private placement exemption can result in regulatory penalties.

Insufficient investor eligibility checks

For RAIFs and SIFs, all investors must qualify as “well-informed.” 

Operational challenges

Vague capital call procedures

Failing to detail timelines, default remedies, and responsibilities for capital calls can disrupt fund operations.

Inadequate conflict-of-interest provisions

 The AIFM Law mandates robust conflict management. An LPA lacking conflict protocols may invite disputes.

Incomplete valuation methodologies

Especially relevant for illiquid assets: ensure you specify how valuations are determined and disclosed.

Unclear GP removal or termination processes

Lack of clarity on GP replacement or SCSp dissolution can lead to prolonged disputes.

Conclusion

For investors looking to take advantage of European growth opportunities with flexibility, tax efficiency and privacy built in, the SCSp stands out as a highly attractive fund structure. 

Alongside Luxembourg’s existing business-friendly environment, the ability to craft bespoke governance, profit-sharing, and risk management protocols means that SCSps can fit a wide range of applications. And with the AIFMD marketing passport, managers can access wider pools of capital.

If you are looking to set up an SCSp, Roundtable’s platform makes the set up simple, streamlining onboarding, compliance and ongoing management.

  • Simple Set Up: From incorporating your SCSp to opening bank accounts, we create a robust foundation for your business.
  • Tailored LPA: You can expect draft tailored LPAs that align with your specific investment strategies.
  • Compliance Built-In: We handle KYC and AML to procure a smooth investor onboarding experience. 
  • Cost-Effective Solutions: Our free platform minimizes setup and ongoing management expenses, freeing up capital to drive better investment returns.

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Simplify your set up

Get your SCSp off the ground faster with Roundtable’s complete digital platform. We handle everything from registration to investor KYC, as well as creating an LPA that fits your needs, so you can focus on finding the right investors.

Find out more by talking to one of our experts.

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SCSp FAQs

What disclosures will I need to make to my local tax authority regarding an SCSp investment?

The SCSp provides annual tax reports, but requirements depend on your country’s laws. Generally, you may expect to have to report your share of income on your local tax return. Please speak to your tax advisor for an assessment of your situation. 

What is the typical duration of an SCSp, and can I redeem before the end of term?

Private equity SCSp’s generally run for 8–10 years, with few early redemption options. Transfers may be allowed subject to GP approval.

How are management and performance fees structured in an SCSp?

Fees follow industry standards: a management fee of about 1.5–2.5% of capital, plus carried interest around 20% of profits above a hurdle rate, as detailed in the LPA.

What legal protections exist for limited partners in Luxembourg?

LPs enjoy limited liability (capped at their contribution), defined information rights, and dispute resolution protections in the LPA. Additional safeguards apply if the SCSp qualifies as an AIF under AIFMD.

Is the SCSp recognized as transparent in my jurisdiction?

Most major jurisdictions recognize the SCSp’s tax transparency, though specific treatment may vary. Verify with your local tax authority for details.

Are there withholding tax savings when investing internationally?

While an SCSp itself can’t directly access tax treaties, using properly structured Luxembourg holding companies can leverage its extensive treaty network to reduce withholding taxes.

Can the partnership agreement be amended as strategies evolve?

Yes—the LPA can be amended according to its provisions, typically requiring GP consent and a majority (or supermajority) of LP interests.

What are the rules for offering SCSp interests to non-European investors?

SCSp interests are offered under private placement rules. Local rules in non‑EU jurisdictions must be followed.

What is the cost of maintaining an SCSp compared to other fund domiciles?

Ongoing costs include Luxembourg domiciliation, accounting, audit, and AIFM fees (if applicable). These costs are generally higher than in the Cayman Islands but comparable to other EU jurisdictions.

Do I need a Luxembourg-based management company?

If the SCSp qualifies as an AIF above thresholds, you must appoint an EU‑based authorized AIFM. This entity may be located in Luxembourg or elsewhere in the EU.

Can a foreign GP manage the SCSp?

Yes, a foreign GP can manage an SCSp, but if it qualifies as an AIF, the GP must secure EU AIFM authorization or appoint an external authorized AIFM.

Are there limitations on marketing to certain investor classes?

Under AIFMD, marketing with a passport is limited to professional investors. For RAIFs or SIFs, investors must qualify as “well‑informed.” Broader marketing requires additional local permissions.

What dispute resolution mechanisms are available for an SCSp?

The LPA typically specifies dispute resolution via Luxembourg courts or arbitration, ensuring confidentiality and familiarity with fund disputes.

Can the SCSp accommodate very long holding periods?

Yes—the LPA can set a term of 10–15+ years or even perpetual durations, tailored to the investment strategy.

How does the SCSp handle ESG disclosures?

If structured as an AIF, the SCSp must comply with the EU’s Sustainable Finance Disclosure Regulation SFDR, categorizing ESG disclosures under Article 6, 8, or 9 as appropriate.

What risk controls are in place at the fund level?

For SCSp AIFs, the authorized AIFM must implement comprehensive risk management, including regular stress testing, monitoring, and reporting per AIFMD requirements.

Are regular audits required for an SCSp?

Authorized AIFMs managing AIFs require annual audited financial statements. Unregulated SCSp’s may not legally require audits, though institutional investors often mandate them via the LPA.

How do cross-border capital flows and currency risks factor into SCSp investments?

The SCSp can be structured with multi‑currency classes and hedging strategies per the LPA, benefiting from Luxembourg’s free flow of capital within the EU and robust banking infrastructure.

Useful legal resources

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