The SLP is established through a contractual arrangement. The Limited Partnership Agreement (LPA) can be in the form of a notarial deed or a private agreement. However, registration with the Luxembourg Trade and Companies’ Registry (RCS) is mandatory for the SLP. Only a portion of the LPA, including the SLP’s name, duration, GP(s) designation, manager(s) designation, and their signatory powers, needs to be filed with the RCS and subsequently made public. Other LPA provisions and details about the identity and contributions of LP(s) are not required for publication.
The GP(s) and LP(s) collaboratively define all terms and conditions within the LPA, encompassing operational and organizational aspects.
There are no legal constraints on the following aspects, which can be freely organized in the Limited Partnership Agreement (LPA) of the SLP:
A Special Limited Partnership (SLP) is transparent for income tax and wealth tax purposes, allowing foreign partners to be taxed in Luxembourg only if engaged in commercial activities through a permanent establishment. No withholding tax is applied to payments, regardless of the partners’ location. However, it is liable to Municipal Business Tax (MBT) if involved in commercial activities on a permanent basis. An administrative circular clarifies that an SLP recognized as an Alternative Investment Fund (AIF) under the AIFM Law is considered non-commercial, exempting it from MBT as long as its General Partner (GP) holds less than 5% of the SLP. For SLPs not meeting AIF criteria, the circular provides criteria and examples to guide the determination of commercial activities subject to MBT.
An SLP established as a Special Investment Fund (SIF) is exempt from corporate income tax (CIT), Municipal Business Tax (MBT), and net wealth tax (NWT). However, it is subject to a 0.01% annual subscription tax based on its Net Asset Value (NAV). Non-resident Limited Partners (LPs) are not expected to face Luxembourg tax on income and gains derived from their involvement in the SLP organized as a SIF.
An SLP established as a Société d’Investissement à Capital Risque (SICAR) is not classified as engaging in commercial activity and is therefore not liable for corporate income tax (CIT), Municipal Business Tax (MBT), or net wealth tax (NWT). Generally, non-resident Limited Partners (LPs) should not be subject to Luxembourg tax on income and gains arising from their participation in the SLP set up as a SICAR.
While the SLP inherently lacks legal personality, the AIFM Law designates its registered office as that of its central administration agent, which, in turn, is deemed to have its statutory seat in Luxembourg. The rights to the assets of the SLP exclusively benefit its creditors. Creditors of a specific partner do not possess direct rights over these assets but solely over the interests held by that partner in the SLP.
