Article by Alf Wilkinson published on 25 January 2016 for Ignites Europe.
Luxembourg plans to make legislative changes to accompany the European long-term investment fund regulation, meaning the vehicle will benefit from a special tax regime. So reports Private Funds Management.
Eltifs will receive protection from double taxation that applies when capital is moved from one jurisdiction to another, making the vehicle more viable for retail investors.
The Eltif regime, which came into force across Europe on December 9 last year, aims to promote long-term investment in areas such as infrastructure, small and medium-sized companies, and other assets lacking liquidity.
Although Luxembourg has established numerous double tax treaties with other nations, most investment funds in the country are not subject to these treaties.
Linklaters partner Freddy Brausch says that Eltifs will receive double taxation protection when capital is moved across borders.
This protection would be of great benefit to Eltifs, given the long-term and cross-border nature of the vehicle.
Mr Brausch adds that this measure will apply exclusively to newly created Eltifs.
He recently spoke about the plans at the European Alternative Investment Conference organised by the Association of the Luxembourg Fund Industry.
Last week France’s Autorité des Marchés Financiers published a guide to assist asset managers with the management and marketing of Eltifs.
The AMF also said it would amend its rules to make some Eltifs available to retail investors.
The European Parliament voted in favour of the new vehicle in March last year.