Practice areas

Luxembourg

EU's n°1 centre for international finance and investment

The Grand Duchy of Luxembourg is a founding Member State of the European Union and hosts several European institutions, including the Court of Justice of the European Union, the General Court and the European Investment Bank.

Over several decades, Luxembourg has developed a legal and regulatory framework supporting international business, cross-border investment, financial services and investment funds. Its position within the European Union, combined with its multilingual and international business environment, has contributed to its role as an important European financial centre.

The following areas are particularly relevant to Luxembourg's legal and economic environment:

Taxation
Corporate law and M&A
Investment funds and asset management
EU litigation

Tax

A comprehensive framework for corporate and cross-border taxation

Luxembourg applies a corporate income tax to companies that are subject to Luxembourg corporate taxation. The tax system also includes municipal business tax and other applicable contributions and levies. The effective corporate tax burden therefore depends, among other factors, on the company's taxable income and municipality of establishment. G

Luxembourg's tax framework includes provisions relating to:

Corporate income tax
Municipal business tax
Net wealth tax
Withholding tax
Value added tax
Transfer pricing
Tax consolidation
Participation exemption regimes
Tax treatment of dividends and capital gains
Interest and financing transactions
Double-tax treaties
EU and international tax rules

The participation exemption regime can, subject to statutory conditions, apply to dividends received and capital gains realised on qualifying participations.

Luxembourg also has an extensive network of bilateral tax treaties and applies European and international measures relating to the exchange of information, anti-abuse rules and the taxation of cross-border activities.

The Luxembourg tax framework has evolved in parallel with OECD and EU initiatives concerning transparency, international tax cooperation and the taxation of multinational enterprises.

Corporate & M&A

A flexible framework for domestic and cross-border transactions

Luxembourg company law provides for several corporate forms, including the public limited company (société anonyme – SA), private limited company (société à responsabilité limitée – S.à r.l.), partnership limited by shares (société en commandite par actions – SCA), and common limited partnership (société en commandite simple – SCS).

These forms are used for a broad range of commercial, investment and holding structures.

Luxembourg company law provides a legal framework for:

Acquisitions and disposals of companies and businesses
Share and asset transactions
Mergers
Demergers
Contributions of assets
Corporate reorganisations
Joint ventures
Shareholders' arrangements
Changes to corporate form
Liquidations
Cross-border mergers, demergers and transformations

Luxembourg legislation expressly provides for cross-border mergers involving Luxembourg companies and companies incorporated under the law of another EU Member State. It also contains specific regimes for European cross-border mergers, demergers and transformations.

M&A transactions may also be subject to European and Luxembourg competition rules, including merger-control requirements where the applicable thresholds and conditions are met.

Investment Funds & Asset Management

EU's biggest investment-fund centre

Luxembourg has developed a large international investment-fund industry covering both retail and institutional investment products.

The principal Luxembourg investment-fund regimes include:

UCITS
Part II undertakings for collective investment
Specialised Investment Funds (SIFs)
Investment Companies in Risk Capital (SICARs)
Reserved Alternative Investment Funds (RAIFs)
Alternative Investment Funds (AIFs)
European Long-Term Investment Funds (ELTIFs)
Money Market Funds (MMFs)

The CSSF is responsible for the prudential supervision of Luxembourg investment vehicles and investment fund managers falling within its supervisory remit. Regulated investment vehicles and relevant fund managers require prior authorisation from the CSSF.

Luxembourg's fund-management framework includes management companies established under Chapter 15 or Chapter 16 of the 2010 Law and alternative investment fund managers regulated under the 2013 AIFM Law. CCSSF

Scale of the fund industry

As of June 2026, assets under management in investment funds domiciled in Luxembourg, including UCITS and alternative investment funds, amounted to approximately €9.07 trillion. AAlfi

Luxembourg is also an important centre for cross-border fund distribution. According to ALFI, Luxembourg-domiciled cross-border funds represented approximately €8.5 trillion of assets under management in 2025.

Regulatory framework

The investment-fund sector operates within a combination of Luxembourg legislation and directly applicable European legislation, including the UCITS and AIFMD frameworks.

The principal Luxembourg legislation includes:

The Law of 17 December 2010 concerning undertakings for collective investment
The Law of 13 February 2007 relating to specialised investment funds
The Law of 15 June 2004 relating to investment companies in risk capital
The Law of 12 July 2013 relating to alternative investment fund managers

The CSSF maintains specific regulatory frameworks for investment vehicles, fund managers, pension funds, securitisation undertakings and European fund labels.

EU Litigation

Luxembourg as the centre of European judicial activity

Luxembourg is the seat of the Court of Justice of the European Union (CJEU), which comprises the Court of Justice and the General Court.

The Court of Justice is responsible for ensuring the interpretation and application of EU law. The General Court principally hears direct actions brought by individuals, companies and other legal persons against acts or decisions of EU institutions, bodies, offices and agencies, as well as certain actions brought by Member States.

The General Court deals with a wide range of matters, including:

Competition law
State aid
EU economic and financial regulation
Intellectual property
Restrictive measures and sanctions
Institutional law
Public procurement
Taxation
Environmental law
EU civil service matters

Judgments of the General Court may, on points of law, be appealed to the Court of Justice.

Preliminary rulings

EU law can be raised before national courts throughout the European Union. Where a question concerning the interpretation or validity of EU law arises, national courts may, and in certain circumstances must, refer questions to the Court of Justice for a preliminary ruling.

Since 1 October 2024, the General Court has also had jurisdiction over preliminary references transferred to it in six specific areas:

VAT
Excise duties
The Customs Code
Tariff classification of goods
Passenger compensation relating to denied boarding, delays or cancellations
The EU emissions trading system

References are initially submitted to the Court of Justice, which determines whether they fall within the areas transferred to the General Court.

The presence of the CJEU and General Court makes Luxembourg an important location for proceedings concerning the interpretation, application and review of EU law.

Co nas wyróżnia?

The firm's work comprises, amongst others, the drafting of articles of incorporation, partnership agreements, fund management regulations, private placement memoranda and prospectuses as well as the ancillary suscription, financing documentation as well as agreements with AIFMs and other advisors and financial service providers.

Clément Konrad & Partners assists investors, limited partners, general partners, asset/fund managers and advisors as well as regulated AIFMs.

The firm also monitors the relations with the regulator (CSSF), depositories, distributors, central administration and regitser agents, appraisers, investment advisors as well as banks, stock exchanges and clearers.

Contact us

E-mail:

office@kcpkonrad.legal

Phone:

T: (+352) 26 84 66

M: (+352) 661 661 964

Address:

KCP Konrad

Villa Mühlenbach

127, rue de Mühlenbach

L-2163 Luxembourg


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