The investment company in risk capital (Société d’investissement en capital à risque – SICAR) is a regulated, fiscally efficient structure designed for private equity and venture capital investments. There are no investment diversification rules, nor lending or leverage restrictions.


An investment into a SICAR is restricted to “well-informed” investors. This term comprises:

* Other investors are those who confirm in writing that they adhere to the status of “well-informed” investors and who either (i) invest a minimum of EUR 125,000 or (ii) have been assessed by a credit institution, an investment firm or a management company which certifies the investors’ ability to understand the risks associated with investing in the SICAR

Legal framework

The SICAR regime was established by the Luxembourg Law of 15 June 2004 (SICAR Law), which was amended in October 2008 and by the Law of 12 July 2013 on alternative investment fund managers (AIFM Law). As a result, the SICAR Law is now divided into two parts: (i) general provisions applicable to all SICARs, and (ii) specific provisions applicable to SICARs which qualify as Alternative Investment Funds (AIFs) and which are required to be managed by an authorised Alternative Investment Fund Manager (AIFM).

Eligible assets

SICARs may only invest directly or indirectly in securities that represent risk capital. Risk capital consists mainly of high risk investments made in view of their launch, development or listing on a stock exchange. The SICAR may also marginally hold financial derivative instruments on an exceptional basis. Temporary investment in other assets is allowed pending they qualify as investment in risk capital.

CSSF circular n° 06/241 clarifies the concept of risk capital under the SICAR Law.

Legal form

A SICAR may take one of six possible legal forms:

  1. A public limited company (société anonyme – S.A.);
  2. A private limited liability company (société à responsabilité limitée – S.à r.l.);
  3. A partnership limited by shares (société en commandite par action – S.C.A.);
  4. A cooperative company organised as a public limited liability company (société cooperative organisée comme une S.A.);
  5. Limited partnership (société en commandite simple – S.C.S. and société en commandite simple à capital variable – S.C.S. à capital variable).

These different entities may be set up as a single fund or as an umbrella fund consisting of multiple compartments, each with a different investment policy. The fund and compartments may have an unlimited number of share classes, depending on the needs of the investors to whom the fund is distributed.

Capital requirement

Subscribed share capital including share premiums must reach EUR 1,000,000 within twelve months of authorisation. At least 5% of each share must be paid up at subscription. A SICAR may opt for variable or fixed share capital.

Authorisation and supervision

As a regulated vehicle, the SICAR must be approved and is supervised by the CSSF. An authorisation file must be submitted to the CSSF within the month following the creation of the SICAR. The authorisation will be granted subject to:

  • the approval of the constitutional documents;
  • the approval of the choice of depositary and auditor;
  • the notification of the directors of the SICAR and of the depositary;
  • the justification that the central administration of the SICAR is situated in Luxembourg.

The directors of the SICAR must be of good repute and have sufficient experience in the performance of their functions in the private equity field.

The SICAR must report to the CSSF twice a year and compile a prospectus.

Sicars which qualify as Aifs

SICARs qualifying as AIFs (SICAR AIFs) are required to appoint an AIFM which can be established in Luxembourg, in another EU Member State or in a third country. They may either appoint an external AIFM or choose being internally managed. In the latter case, the SICAR AIF will itself be considered as the AIFM. As a consequence, all of the AIFM Law’s obligations applying to the AIFM will have to be complied with by the SICAR AIF.

SICAR AIFs managed by an EU authorised AIFM benefit from a passport allowing AIFMs to market the SICAR’s shares, units or partnership interests to professional investors within the EU through a regulator-to-regulator notification regime.

For more details, please click here to access our brochure on the AIFMD.


SICARs are not subject to subscription tax.

In terms of income tax, there is a tax exemption for income derived from transferable securities and for one year for income on cash held for the purpose of a future investment. The remaining income is subject to the ordinary corporate income tax. SICARs constituted in the form of an investment company may benefit from a large number of double tax treaties concluded by Luxembourg.

Management services – except mere technical services – provided to a SICAR are exempt from Luxembourg VAT.

A limited partnership is to be treated as transparent for Luxembourg tax purposes.

Umbrella structures

A SICAR can be set up in the form of an umbrella fund with multiple segregated compartments. Each compartment forms a distinct part of the SICAR’s patrimony and the prospectus has to state the investment policy of each compartment.

The rights of investors/creditors are limited to a specific compartment in which they hold securities. It is possible to liquidate a compartment separately without liquidating the others (only the liquidation of the final compartment triggers the SICAR’s liquidation).

Umbrella structures could therefore potentially be useful to introduce several investment strategies and hence meet various needs of several investors in the same SICAR.

They could also potentially help to reduce set up costs and achieve economies of scale.

Service providers


SICARs must appoint a depositary, which is responsible for the custody of assets.

The individuals who represent the depositary must be of good repute and have sufficient experience in the performance of their functions in the private equity field.


The SICAR prepares an annual report which is audited by an authorised external auditor with appropriate professional experience. There is no obligation to produce a semi-annual report.

specific aspects: euveca and eusef

SICARs which qualify as European Venture Capital (EuVECA) or European Social Entrepreneurship (EuSEF) Funds have the possibility to be subject to the EuVECA and EuSEF regulation respectively. Both regulations introduce a passport for the marketing of AIFs to EU-based eligible investors.

The Valsen Advantage

  1. We will advise you on the optimal legal structure for your requirements, size, expectations and circumstances.
  2. Valsen will assist to complete every form for each process in the best way we know how (Based on our many years’ experience with various regulators and service providers across the world)
  3. We are very hands on in the post filing period checking with the regulator and service providers and updating you regularly.
  4. Any queries raised by the regulators and service providers during processing will be quickly synthesized by us and we shall craft the right responses to move the process forward fast.
  5. We have a full in-house compliance support for all compliance requirements with the regulator and service


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