Luxembourg has implemented a flexible legal framework for securitisations since the adoption of the law of 22 March 2004 on securitization, as amended (the "Securitisation Law"). In 2022 the Securitisation Law has been amended in various respects in order to provide for an even greater flexibility (the "2022 Amendment"). Together with the Luxembourg law of 10 August 1915 on commercial companies, as amended (the "Company Law"), such laws have enabled investors and asset managers to find a reliable, flexible and investor friendly environment to structure their securitisation transactions.

This brochure offers an overview of the Securitisation Law and its possibilities to structure securitisation undertakings in Luxembourg.


The Securitisation Law offers the possibility to structure securitisation undertakings in the form of a securitisation company or in the form of a securitisation fund. Securitisation undertakings may submit themselves to the Securitisation Law through an "opt-in" via their constitutive documents, management regulations or issue documents in order to benefit from the possibilities offered by the Securitisation Law.

I.1 Securitisation companies

Securitisation companies must take one of the forms provided by the Securitisation Law.

Since the 2022 Amendment which has expanded the forms of companies that may be used to set up a securitization company the following corporate forms are available for structuring:

  • Société Anonyme (SA) (public limited company)
  • Société en Commandite par Actions (SCA) (corporate partnership limited by shares)
  • Société à Responsabilité Limitée (SARL) (private limited liability company)
  • Société Coopérative organisée comme une société anonyme (SCoopSA) (co-operative company organised as a public limited company)
  • Société en Commandite Simple (SCS) Common limited partnership)
  • Société en Commandite Spéciale (SCSp) (special limited partnership)
  • Société en Nom Collectif (SNC) (General corporate partnership)
  • Société par Actions Simplifiée (SAS) (Simplified joint stock company)

The SCS and the SCSp are partnership structures that have been very popular in the fund industry, and allow for great structuring flexibility. Furthermore, SCS and SCSp are tax transparent and therefore add another tool for sponsors alongside securitisation funds. The SCSp is also a corporate form that has no legal personality, contrary to the other available corporate forms.

The SCA, the SCS and SCSp allow asset managers to offer an investment in equity to potential investors, while ensuring that they will be able to retain control through the general partner.

I.2 Securitisation funds

Securitisation undertakings may also be organised as a securitisation fund, which does not have a legal personality and will be managed and represented vis-à-vis third parties by a Luxembourg incorporated management company, which is unregulated. Securitisation funds may consist of one or several co-ownerships or one or several fiduciary estates. The management regulations of the Securitisation fund shall expressly specify whether the fund is subject to the co-ownership rules or to the trust and fiduciary rules.

Unlike investment funds, securitisation funds are not subject to any annual subscription tax.


II.1 Direct or indirect acquisition of all types of assets

The Securitisation Law provides for a broad definition of "securitisation", which allows the securitisation of all types and classes of assets. Securitisation undertakings may acquire assets (whether movable or immovable, tangible or intangible) or assume risks to be securitised, either directly or indirectly, including through a wholly-owned or partially owned subsidiary of the securitisation undertaking.

The Securitisation Law offers flexibility in the assumption of risks as securitisation undertakings may either directly acquire the assets (by a so-called true sale), or may opt for synthetic securitisations by using credit derivatives. The Securitisation Law expressly clarifies that the use of credit derivatives does not constitute insurance activities that would be subject to the Luxembourg law of 7 December 2015 on the insurance sector, as amended. The Securitisation Law further provides that the assignment by or to a securitisation undertaking of receivables entails the transfer of the guarantees and security interests relating to such receivable.

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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.