Creating a RAIF in Luxembourg: Practical Guide 2025
Complete guide to launching a Reserved Alternative Investment Fund in Luxembourg: structure, advantages, incorporation process, and detailed costs.
Updated: December 2025
The RAIF (Reserved Alternative Investment Fund) is the vehicle of choice for managers wanting to quickly launch a fund in Luxembourg without prior CSSF approval.
What is a RAIF?
Introduced in 2016, the RAIF combines the advantages of regulated funds (SIF) with accelerated time-to-market. It is not directly supervised by the CSSF but must be managed by an authorized AIFM (Alternative Investment Fund Manager).
Key Characteristics
| Characteristic | RAIF |
|---|---|
| CSSF approval | Not required |
| Manager (AIFM) | Mandatory, EU-authorized |
| Investors | Well-informed investors only |
| Minimum capital | €1,250,000 (within 12 months) |
| Launch timeline | 4-6 weeks |
| Asset classes | All (PE, real estate, debt, hedge) |
RAIF Advantages
Speed to Market
Unlike SIFs which require CSSF approval (3-4 months), a RAIF can be operational in 4 to 6 weeks. This speed is a decisive advantage for seizing market opportunities.
Investment Flexibility
- No restrictions on asset classes
- Leverage without regulatory limits
- Multiple compartments with asset segregation
- Tailored investment policy
Advantageous Tax Regime
- No income tax at fund level
- Reduced subscription tax: 0.01% per year
- No withholding tax on distributions
- Access to tax treaties (depending on structure)
Eligible Investors
RAIFs are reserved for well-informed investors, defined as:
- Institutional investors
- Professional investors
- Investors investing at least €125,000
- Investors certified as well-informed by a credit institution, PSF, or management company
Available Legal Forms
| Form | Type | Characteristics |
|---|---|---|
| SICAV | SA, SCA | Variable capital, corporate structure |
| SICAF | SA, SCA, SARL | Fixed capital, suited for PE/real estate |
| FCP | Co-ownership | No legal personality, tax transparent |
| SCS/SCSp | Limited Partnership | Very popular for PE/VC, tax transparent |
Incorporation Process
Step 1: Structuring (1-2 weeks)
- Choice of legal form
- Definition of investment policy
- Selection of AIFM
- Structuring of share classes and distribution waterfalls
Step 2: Documentation (2-3 weeks)
- Drafting of constitutional documents (articles, LPA)
- Preparation of PPM (Private Placement Memorandum)
- Management agreement with AIFM
- Contracts with service providers (depositary, administrator)
Step 3: Incorporation (1 week)
- Document signing before notary (if applicable)
- Registration with RCS
- Bank account setup
- Notification to AIFM of takeover
Step 4: Operational
- First closing and capital calls
- Start of investments
- Investor reporting
Required Service Providers
AIFM (Manager)
The RAIF must be managed by an EU-authorized AIFM. The AIFM can be:
- Internal: The fund itself is authorized as AIFM (rare)
- External Luxembourg: Luxembourg management company
- External EU: AIFM from another member state (passport)
Depositary Bank
A Luxembourg depositary bank is mandatory for:
- Asset custody
- Cash flow monitoring
- AIFM oversight
Administrative Agent
- NAV calculation
- Register keeping
- Investor services
- Regulatory reporting
Auditor
Mandatory annual audit by a Luxembourg-approved firm.
Setup and Operating Costs
Setup Costs
| Item | Cost |
|---|---|
| Structuring and legal advice | €30,000 - €80,000 |
| Incorporation and notary | €5,000 - €15,000 |
| Documentation (PPM, LPA) | €15,000 - €40,000 |
| Service provider setup | €10,000 - €25,000 |
| Total | €60,000 - €160,000 |
Annual Costs
| Item | Annual Cost |
|---|---|
| AIFM (management fees) | 0.05% - 0.15% of AUM + fixed |
| Depositary bank | 0.02% - 0.10% of AUM |
| Administrative agent | €25,000 - €100,000 |
| Audit | €15,000 - €50,000 |
| Subscription tax | 0.01% of AUM |
| Domiciliation and miscellaneous | €10,000 - €30,000 |
RAIF vs SIF vs SICAR
| Criterion | RAIF | SIF | SICAR |
|---|---|---|---|
| CSSF approval | No | Yes | Yes |
| Launch timeline | 4-6 weeks | 3-4 months | 3-4 months |
| Asset classes | All | All | Risk capital |
| Subscription tax | 0.01% | 0.01% | 0% |
| AIFM mandatory | Yes | No (but common) | No (but common) |
Frequently Asked Questions
Can a RAIF be distributed to retail investors?
No, RAIFs are strictly reserved for well-informed investors. For retail distribution, you need to opt for a UCITS fund.
Can a non-Luxembourg AIFM be used?
Yes, an AIFM authorized in another EU member state can manage a Luxembourg RAIF through the AIFMD passport.
What is the minimum viable size for a RAIF?
Given fixed costs, a RAIF is generally viable from €20-30 million in assets under management. Below this, fees may be disproportionate.
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