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Partnerships are vehicles of choice for the asset management
industry, especially in the field of private equity, real estate,
debt and other ‘illiquid’ strategies.
Luxembourg law has known partnerships since the implementation
of the Law of 10 August 1915 on commercial companies
(“Company Law“), and to some extent
since the enactment of the first Commercial Code in 1807.
Notwithstanding this historical existence of partnerships in
Luxembourg’s legal system, the domestic regime lacked a certain
amount of flexibility available to partnerships in other
jurisdictions that was key to their success in the asset management
In 2013, Luxembourg seized the opportunity of the implementation
of the Alternative Investment Fund Managers Directive
(“AIFMD“) to increase its attractiveness
as a leading investment fund centre and to boost the attractiveness
of its partnerships.
Luxembourg lawmakers thoroughly amended and modernised the
limited partnership and sought to align the regime of local
partnerships with those of competing jurisdictions, thus expanding
the structuring possibilities of investment vehicles electing for
the partnership regime, mainly to respond to the needs of the asset
The new Luxembourg Partnership, whilst sticking to its original
principles, now embraces the flexible nature of Anglo-Saxon types
of partnerships, with only a few variations. This new approach has
allowed asset managers to set up private funds benefiting from the
AIFMD marketing passport in a format that they are more familiar
with and which allows full interaction with other vehicles of their
product range (e.g. Delaware feeder of parallel funds for the US
Managers looking to set up their fund in Luxembourg can now
choose between three types of partnerships: two are based on the
Anglo-Saxon models, the Common Limited Partnership
(“SCS” or société en
commandite simple) and the Special Limited Partnership
(“SCSp” or société en
commandite spéciale), and one is based on the more
continental type of partnership, the Partnership Limited by Shares
(“SCA” or société en
commandite par actions).
The purpose of this Memorandum is to describe the principal
features of the different Luxembourg partnerships (while focusing
mainly on the SCS and the SCSp), and the regulatory options under
which they may be set up. Unless provided otherwise, reference to
“Partnerships” in this
Memorandum1 should be understood as an indistinct
reference to the SCA, SCS and SCSp.
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1. Except in Chapter III where the term
“Partnerships” will refer only to SCS and
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.
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