The SLP can be setup as an unregulated alternative Investment Fund under the AIFMD

The Special Limited Partnership is a form of companies which can be incorporated in Luxembourg by one General Partner (GP) and one Limited Partner (LP – investor). It proposes many advantages, among them:

  • A setting up within a matter of days
  • No prior regulatory approval
  • Investment in any type of assets
  • Fully tax transparent
  • No AIFM under EUR 100 Mio

Special Tax treatment

Following the implementation of AIFMD (Alternative Investment Fund Managers Directive) into Luxembourg law, the rules which apply to Luxembourg limited Partnerships have changed.

Luxembourg Tax Law (LTL) considers that CLP and SLP are deemed tax transparent for the application of income tax.

The tax exemption of the partner’s incomes will be granted assuming that the General Partner, being a Luxembourg capital company, holds less than 5% of the partnership interests.

This is also applicable to municipal business tax.

This means that a Partnership will never become taxable itself. Only the Partners of the Partnership may be taxable depending on the conditions mentioned below.

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