We coordinate the partnership agreement, subscription pack and side letters with Luxembourg counsel, and provide the templates and the commercial input. Fee basis, hurdle, catch-up and equalisation are read later by whoever runs your capital calls. We make sure the terms are operable before they are signed.
Service proposal prepared for the chosen vehicle and regime, signed, then a kick-off call with the onboarding team.
Documents requested on the basis of your structure, then reviewed and analysed by the onboarding team.
Coordination with your legal advisor on the articles or the LPA, checking completeness before anything goes to the notary.
Bank or payment institution selected and onboarded, initial share capital wired, capital blocked until the deed is signed.
Deed signed before the notary, capital unlocked by the bank, entity registered with the RCS and RBE and operational.
Four structures cover most of what our clients build. Each carries a different regulatory footprint, and that footprint should be settled before drafting starts.
A fund whose manager stays below the AIFMD thresholds and registers with the CSSF instead of seeking full authorisation. In practice an SCSp or an SCA: closed-ended, drawdown capital, a defined investment period.
Art. 3(2)–(3), Law of 12 July 2013
A special limited partnership formed per deal or per syndicate. Tax-transparent, no minimum capital, constituted by private agreement — the lightest way to pool backers behind a single ticket without building a fund around it.
Art. 320-1 to 320-9, Law of 10 August 1915
A fully taxable resident company used to hold participations. Not a regulated product: it relies on the participation exemption and Luxembourg's treaty network rather than on a fund regime, and it files like any commercial company.
Art. 166 LIR; Regulation of 21 December 2001
One asset, one balance sheet. An S.à r.l. or S.A. holding a property, a loan, a co-investment or an escrow position, ring-fenced from the rest of the group and easy to transfer or wind down on its own.
Law of 10 August 1915
Both limbs are tested on the assets of all AIFs the manager manages, directly or by delegation. Confirm the position in writing before the structure is built around it.
Total assets under management, including assets acquired through the use of leverage.
Applies only to unleveraged portfolios carrying no redemption rights exercisable for five years from the date of initial investment in each AIF.
A Luxembourg fund is defined by its documents long before it holds a single asset. The partnership agreement or the articles set the economics, the subscription pack sets out how capital comes in, side letters adjust terms for individual investors, and resolutions record every decision taken afterwards. Each of these is negotiated at a different time and often by different people, yet all of them are applied together at every capital call, distribution and reporting date. Getting them consistent from the start is cheaper than reconciling them later.
Most venture capital and private equity funds set up in Luxembourg today use a special limited partnership (SCSp) or a common limited partnership (SCS) under Articles 320-1 and 310-1 et seq. of the Law of 10 August 1915 on commercial companies. The partnership agreement is a private contract: only an extract is filed with the RCS and published in the RESA, so the economic terms stay confidential between the general partner and the limited partners.
That freedom of contract is the reason the agreement deserves the most attention. It defines commitments and drawdowns, the management fee basis and its step-down, and the distribution waterfall – whole-of-fund or deal-by-deal – together with the hurdle, catch-up, carried interest and clawback. It also governs investor default, transfers of interests, key person events, removal of the general partner, extensions of the term and the end of the investment period.
Every economic clause in a partnership agreement is eventually turned into a calculation – by an administrator, an accountant or a platform. A preferred return needs a rate, a compounding convention and a base. A fee step-down needs a trigger date and a new base. An equalisation mechanism for later closings needs to say which drawdowns are equalised, at what interest rate and to whom the payment is allocated. When one of these elements is missing, someone has to interpret it at the first capital call, usually under time pressure and without the people who negotiated it.
Reviewing the agreement for operability before signing is the cheapest moment to fix these gaps. Counsel can resolve an ambiguity in one sentence during drafting; the same ambiguity after the first closing may require investor consent to amend the agreement.
Where the fund, its general partner or a holding vehicle takes a corporate form – a société à responsabilité limitée (S.à r.l.), a société anonyme (S.A.) or a société en commandite par actions (SCA) – the constitutive document is the articles of association, executed before a Luxembourg notary and published in full. The articles govern share classes, transfer restrictions, the powers of the managers or the board, quorum and majority rules, and the allocation of profits.
Corporate vehicles also carry statutory rules that the articles cannot override. For an S.à r.l., for example, a transfer of shares to a non-member requires the approval of members representing three quarters of the share capital under Article 710-12 of the Law of 10 August 1915. Drafting has to work with those rules, not around them.
The documents of an unregulated SCSp managed by a registered AIFM under Article 3 of the Law of 12 July 2013 on alternative investment fund managers look different from those of a reserved alternative investment fund (RAIF) under the Law of 23 July 2016 or a specialised investment fund (SIF) under the Law of 13 February 2007. RAIFs and SIFs require an offering document and are reserved to well-informed investors, and an authorised AIFM must provide investors with the disclosures listed in Article 21 of the Law of 12 July 2013 before they invest.
Settling the manager regime and the product regime before drafting starts avoids rewriting the partnership agreement, the offering document and the subscription pack at the same time – usually under pressure from a first closing date.
The subscription agreement turns an investor’s decision into a binding commitment. It records the committed amount, the investor’s representations on its status and eligibility, the mechanics for drawdown notices and the consequences of default. It is also where the anti-money laundering file begins: identification of the investor and its beneficial owners under the Law of 12 November 2004 on the fight against money laundering and terrorist financing and CSSF Regulation No 12-02.
A well-built subscription pack collects exactly the data the fund will need later – tax residence and CRS/FATCA self-certification, bank details, contact persons for notices, reporting preferences – so that onboarding does not have to be repeated at the first capital call.
Preferential terms granted to one investor – fee discounts, co-investment rights, reporting requirements, transfer permissions or excuse rights – often trigger rights for others under a most-favoured-nation clause. Each side letter has to be consistent with the partnership agreement, and the fund needs a record of who holds which right and since when.
Without such a register, an MFN election process at the end of fundraising becomes a manual exercise across dozens of documents, and preferential terms risk being applied inconsistently in fee and distribution calculations.
Not every vehicle needs a fully negotiated agreement. A syndicate SCSp formed for a single investment, a carry vehicle or a single-asset SPV can often be documented from well-maintained templates, with counsel reviewing the deal-specific terms. A first-time fund raising from institutional investors will usually need bespoke drafting, because investor counsel will negotiate against market standards such as the ILPA Principles.
Either way, the drafting stays with Luxembourg counsel. What changes is how much of the groundwork – term sheet, templates, commercial input and coordination – is prepared before counsel starts.
Subsequent closings, capital calls, distributions, amendments to the partnership agreement, transfers of interests and the approval of annual accounts all require resolutions of the general partner, the managers or the board, and in some cases a meeting of investors or shareholders. For corporate vehicles, annual accounts must be approved within six months of the financial year end and filed with the RCS.
Changes to managers, the registered office or the articles must be reflected with the RCS within one month, and changes in beneficial ownership must be reported to the beneficial owner register (RBE) under the Law of 13 January 2019. Keeping these filings in step with the documents is part of running the fund, not an afterthought.
Send us your term sheet or draft agreement. We will tell you which package fits and what we would raise with counsel.
Fundequate Sàrl is a company registered and domiciled in Luxembourg. We provide innovative solutions to simplify fund structuring, administration, and investor onboarding, ensuring compliance, transparency, and efficiency for fund managers and investors.
