Italy: SICAV Investment Funds In Luxembourg: How To Create Them And How Much Does It Cost?

Last Updated: 2 July 2019
Article by Arnone & Sicomo
Most Popular Article in Italy, July 2019

SICAV Investment Funds in Luxembourg: how do they work? 

The acronym SICAV means "open-ended investment company" and refers to share companies aimed at collectively investing the assets collected through the public offering of shares, whose value amounts to the net worth of capital account divided by their number.

SICAV Investment Funds were introduced in Italy by the Legislative Decree no. 84/1992. They are characterized for being the only kind of company which allows shareholders to enter and exit the company at any moment, hence the name "open-ended investment company".

Moreover, investors can buy registered or bearer shares, thus becoming shareholders of the SICAV company and acquiring the right to take part in shareholder meetings, as well as to influence management choices in proportion to the number of shares they own.

Article 1 of the Italian Legislative Decree no. 58 of 24 February 1998 (the so called Consolidated Law on Finance) includes SICAV among collective investments undertakings. Therefore, SICAV Investment Fundsare subject to supervision by the Bank of Italy and Consob.

SICAV Investment Funds are constituted upon authorization of the Bank of Italy, provided that the minimum capital anounts to 1 million euros.

The assets of a SICAV Investment Fund, then, coincides with the company's share capital, and, therefore, it increases with the access of new shareholders and with capital gains realised during the course of business activities. 

Since the share capital has no nominal value, SICAV shares only have an initial issue price and, subsequently, an issue and redemption value, equal to the net asset value (total asset value net of costs and taxes) divided by the number of outstanding shares.

SICAV Investment Funds should not be confused with mutual investment funds. Even though both offer their investors the possibility to freely enter and exit the company, mutual investment funds involve a separation between the assets of the fund and those of the company managing he fund itself, while in SICAV Investment Funds the open-end share capital is invested.

SICAV Investment Funds in Luxembourg: how to create a SICAV Investment fund? 

SICAV are the most popular investment funds in Europe. The reasons of their popularity are: favoured tax conditions, flexible legislation, professionalism and experience of local providers, low domiciliation and setting-up costs, political and social stability, and good coordination between legislator and supervisory authorities.

SICAV Investment Funds are share companies whose assets coincide with the net asset of the company. Their Board of Directors play a supervisory role, and can delegate managing tasks to specialised companies, supervised by the Luxembourgian Commission de Surveillance du Secteur Financier (CSSF).

The Custodian Bank, based in Luxembourg, keeps the assets of the fund and guarantees the investors' interests.

Usually SICAV Investment Funds are distinguished according to the different financial instruments in which the assets of the company can be invested:

- part I, which includes harmonized SICAV companies, i.e. companies satisfying the requirements of the UCITS Directive, thus distributable in EU Countries;

- part II, non harmonized SICAV companies, which cannot be freely distributed in EU Countries, unless they comply with the terms established by local authorities.

SICAV can be constituted as:

- "umbrella" funds;

- independent funds;

- UCITS;

- retail funds, which are not subject to UCITS Directive;

As regards umbrella funds, they consist in different funds, each of which is autonomous and has its own assets, objectives, and investment policies and strategies. Moreover, each fund can issue a specific category of shares.

Investors can purchase different shares of one or more funds, and have the right to shift their investment from one fund to another free of charge, just converting their shares in another fund.

Each fund has its own net asset value. Therefore, the subscription price per share is variable. The assets of a SICAV company, thus, are actually the sum of the assets of the single funds.

Each fund can be liquidated separately, without involving the other funds. Only liquidating the last fund results in liquidating the entire SICAV company. 

SICAV Investment funds in Luxembourg: taxation 

Luxembourgian SICAV Investment funds are not subject to taxation. This latter is actually the liability of the investor.

SICAV Investment fundsare subject tolocal dividend withholding tax, as imposed by the country in which the dividend is issued. Thanks to some tax treaties, anyway, the applied taxation can be reduced.

Finally, they are subject to a "Taxe d'abonnement" of 0.05% per annum on the net asset value of the fund for retail investors and of 0,01% per annum on the net asset value of the fund for institutional investors.

Click here for more information about SICAV Investment funds in Luxembourg. 

SICAV Investment funds in Luxembourg: how can we help you? 

Arnone&Sicomo International Law Firm provides you legal advice for constituting SICAV Investment funds in Luxembourg. We believe that investing in open-ended investment companies offers a range of benefits usually foreclosed to single investors. Therefore, we offer our clients the possibility to diversify their portfolios according to their specific needs and their appetite for risk/profit.

Our lawyer in Luxembourg examine each single case with an eye to innovation, taking into account the evolution of international market needs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions