I. Securitisation: concept

Luxembourg's Securitisation Law of March 22nd, 2004, defines the concept of securitisation as follows: a business transaction in which a Securitisation Structure or Securitisation Vehicle (Special Purpose Vehicle, SPV) acquires or assumes direct or indirect risks from receivables, from other assets, assumed from third parties or from all or some obligations inherent in the business activities of third parties. The securitisation is wholly performed by such a Securitisation Vehicle (SPV) or a SPV is involved in such a transaction through the complete or partial assumption of the securitised risks or through the issuing of securities. A Securitisation Vehicle (SPV) finances itself from the issuing of securities whose value or the proceeds from which are dependant upon the assumed risks. A distinction requires to be made regarding Securitisation Vehicles (SPV) in Luxembourg between non-regulated Securitisation Companies and Securitisation Funds.

II. Legal structure of a Securitisation Vehicle (SPV) in Luxembourg

1.1. Securitisation Company

A Securitisation Company in Luxembourg can only be formed as a corporation and subsequently as a Public Limited Company (PLC., Corp./SA); a Limited Liability Company (LLC., Ltd./SARL); a Partnership Limited by Shares (SCA)  or as a Co-operative in the form of a Public Limited Company (SCOSA). In practice in Luxembourg, the Public Limited Company (PLC., Corp./SA) is the preferred form, particularly if issued securities are to be publicly sold. Such activity is not possible with a Limited Liability Company (LLC., Ltd./SARL).

A Securitisation Company in Luxembourg is formed through the recording of its articles of association by a notary. Its articles of association will subsequently be published in the Official Bulletin (Mémorial C) and lodged with Luxembourg's Trade and Companies Register. The minimum capital of a Securitisation Company is dependent upon the legal form chosen.

1.2. Securitisation Fund

In contrast to a Securitisation Company, a Securitisation Fund in Luxembourg does not have legal personality and is managed by a Management Company resident in Luxembourg which must be a Trading Company. A Securitisation Fund in Luxembourg is formed in contractual form as jointly owned assets or as trust assets. However, the Securitisation Fund's assets must be separated from those of the Management Company.
No minimum capital is prescribed for a Securitisation Fund in Luxembourg. The managing Management Company must satisfy the minimum capital requirement prescribed for its legal form.

1.3. Separate compartments

The assets of a Securitisation Vehicle (SPV) in Luxembourg may be separated into a single or several compartments if so permitted by the articles of association of a Securitisation Company in Luxembourg or the contractual provisions of a Securitisation Fund.

2. Securitisation structure

The permitted Securitisation Structures are the „True Sale“ transaction and the „Synthetic“ transaction. In a „True Sale“ transaction, the securitisation takes place through the transfer of the legal ownership of the assets. In a „Synthetic“ transaction, the securitisation takes place through the transfer of the credit risks of the assets.

3. Asset classes (securitisation objects)

There exist no restrictions on which assets may be securitised. Securitisation transactions may consequently pertain to moveable and immoveable assets including but not limited to, for example, diamonds; intellectual property; receivables as well as all activities having a real value or which are expected to generate proceeds in the future. The securitised assets will finally be represented by registered or bearer shares including, for example, shares, certificates and bonds.

4. Supervision

If a Securitisation Vehicle (SPV) in Luxembourg issues securities to the public, it requires the consent of and is subject to the supervision of Luxembourg's Financial Market Authority (CSSF). Moreover, a Securitisation Vehicle (SPV) in Luxembourg must entrust its current assets, including its securities, to a bank in Luxembourg on a fiduciary basis.

III. Tax structure of a Securitisation Vehicle (SPV) in Luxembourg

1. Securitisation Company

1.1.    Corporate taxation

All Securitisation Companies in Luxembourg are subject to corporate taxation at a rate of 29.22%. This said rate consists of the following components: corporate income tax at a rate of 21% on income exceeding 15,000 EUR (or a rate of 20% for income not exceeding 15,000 EUR); the Solidarity Surtax at a rate of 7% as well as the Municipal Business tax at a rate of 6.75%. Therein, the rate of corporation tax may be reduced through the obligations arising from the investors' remuneration such as interest or dividends. All Securitisation Companies resident in Luxembourg which do not require a trade licence and whose assets, securities and bank balance together exceed 90% of its balance sheet total are required to pay only the minimum corporate taxation of 3,210 EUR (3,000 EUR plus the 7% Solidarity Surtax). Due to a Securitisation Company in Luxembourg having unlimited tax liability, it can benefit from Luxembourg's network of double taxation agreements.

1.2. Tax exemptions

A Securitisation Company in Luxembourg is neither liable to the net wealth tax nor to withholding tax on distributions to its investors.

2. Securitisation Funds

Due to a Securitisation Fund in Luxembourg lacking its own legal personality, it is the shareholders and their income which is liable to tax and not the Fund itself.

A Securitisation Fund in Luxembourg is neither liable to income tax nor to the so-called „subscription tax“ („Tax d’ Abonnement“). As also applies in the case of a Securitisation Company in Luxembourg, a Securitisation Fund in Luxembourg is not liable to withholding tax on distributions to its investors.


Our lawyers and tax experts stand ready to advise you personally and free of charge during the decision-making process and throughout the formation/incorporation/setting up process of a Securitisation Vehicle (SPV) in Luxembourg.

Please contact us by telephone through the following telephone number

00352 250 345 27

(Monday - Friday between 9am and 4pm)

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The formation/incorporation/setting up of a company in Luxembourg takes place within a few days.


In Luxembourg, the following documents must be produced when attending an appointment with a notary for the formation/incorporation/setting up of a company:

  • Copies of the passports of and proof of address of all directors, members of the board of directors and members of the supervisory bodies (or in the case of legal persons, an extract from the Trade and Companies Register)
  • Powers of Attorney for those persons appearing before the notary in the place of the shareholders 
  • Proof from the bank that the minimum capital required has been reserved or an auditor’s report
  • Statement of beneficial ownership of the company