A reserved alternative investment fund, or RAIF, combines a Luxembourg fund label with indirect supervision. The fund itself does not go through CSSF product approval. Supervision operates through the external authorised AIFM that the RAIF must appoint.
This makes the RAIF different from a plain SCSp and from a regulated SIF or SICAR. It offers a statutory fund framework without direct product authorisation, but it also brings mandatory investor, manager, depositary and audit rules.
The basic legal structure
The RAIF Law of 23 July 2016 requires the vehicle to be an alternative investment fund. It must therefore raise capital from a number of investors and invest it under a defined policy for their benefit.
A RAIF can use several legal forms. In private equity and private debt, the SCSp is common because its economics and governance can be set in a limited partnership agreement. The RAIF can also be organised in corporate form or as a common fund.
The constitutive documents must expressly place the vehicle under the RAIF Law. The offering document must state clearly that the fund is not supervised by a Luxembourg supervisory authority.
Investors must be well informed
RAIF interests are reserved to well-informed investors. Institutional investors and professional investors qualify directly.
Another investor must confirm in writing that it adheres to well-informed status. It must then either invest at least EUR 100,000 or obtain an assessment of its expertise, experience and knowledge from one of the institutions listed in the law. Those institutions include a credit institution, an investment firm, a UCITS management company or an authorised AIFM.
The EUR 100,000 threshold was introduced by the Law of 21 July 2023, replacing the former EUR 125,000 amount. The threshold does not turn the RAIF into a retail product. Distribution rules and the AIFMD marketing framework still apply.
An authorised AIFM is mandatory
A RAIF must appoint an external AIFM authorised under the full AIFM Law. A registered sub-threshold manager is not sufficient.
The AIFM is responsible for portfolio management and risk management. It also operates within the rules on valuation, delegation, conflicts, reporting and marketing. A sponsor may use its own authorised manager or appoint a third-party AIFM, but the regulated responsibility remains with the appointed AIFM.
The RAIF can use the AIFMD marketing passport to professional investors through its authorised AIFM, subject to the passport conditions and notification process. That passport is a feature of the manager’s authorisation, not a direct CSSF approval of the fund.
Depositary, audit and operating framework
The RAIF must appoint a Luxembourg depositary within the statutory categories. The depositary’s duties depend on the assets and the AIFM framework, but include the functions assigned by the AIFM and RAIF laws.
The accounting information in the annual report must be audited by an approved statutory auditor. The RAIF must prepare that report within the legal period. These are statutory requirements rather than optional institutional features.
The relevant statutory amount must reach EUR 1.25 million within 24 months. The test concerns net assets for a common fund or SCSp and capital plus issue premium for an investment company. The 2023 reform extended the former 12-month period. These are fund-level requirements, not minimum investments for each investor.
Risk spreading and compartments
A standard RAIF must follow the principle of risk spreading. The law does not reduce that principle to one universal concentration percentage. The investment policy and the nature of the assets determine how diversification is assessed.
A RAIF may create compartments if its constitutive documents allow them. The law recognises segregation between compartments, subject to the wording of those documents. This allows one umbrella to hold several strategies or vintages without treating them as a single asset pool.
The umbrella still needs coherent governance. Allocation of expenses, cross-compartment contracts, valuation and conflicts must follow the segregation described to investors.
Two tax regimes
The standard regime and the Article 48 risk-capital regime should not be mixed.
| Point | Standard RAIF | Article 48 risk-capital RAIF |
|---|---|---|
| Investment scope | Broad, subject to risk spreading | Exclusively investment in risk capital |
| Subscription tax | 0.01% a year on quarterly net assets, subject to exemptions | Not applicable |
| Direct-tax framework | Exemption provided by the RAIF Law | Separate Article 48 treatment, influenced by legal form |
Under the standard regime, no Luxembourg corporate income tax, municipal business tax or net wealth tax is due at fund level apart from taxes expressly preserved by the law. Distributions are not subject to Luxembourg withholding tax. The 0.01% subscription tax is calculated on net assets at the end of each quarter, with exemptions for defined asset categories and structures.
Article 48 is available only when the constitutive documents restrict the object to investment in risk capital. It removes the subscription tax and applies a separate direct-tax framework broadly aligned with the SICAR regime. A corporate and a partnership RAIF do not reach the result through the same legal route, so the legal form and asset qualification must be reviewed together.
When the RAIF changes the operating model
The RAIF adds a recognised product regime, an authorised AIFM, a depositary, annual audit and statutory compartments. Those features can fit a multi-investor fund that needs the AIFMD marketing passport to professional investors or an institutional operating framework.
They also create fixed governance and service-provider requirements. A compact vehicle that does not need the RAIF label or passport may instead use a plain SCSp under the AIFM rules that apply to its manager. The distinction is developed in the comparison of a RAIF and a plain SCSp.
Conclusion
The RAIF is not an unregulated shortcut. It is a fund regime supervised through an authorised AIFM rather than direct product approval. Its fit depends on the investor perimeter, distribution plan, need for compartments and willingness to maintain the depositary, audit and minimum-asset framework required by law.
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Frequently Asked Questions
What is a Luxembourg RAIF?
A RAIF is a Luxembourg alternative investment fund operating under a dedicated product regime. The fund itself is not approved or supervised by the CSSF. It must instead appoint an external authorised AIFM and comply with the RAIF product rules.
Who can invest in a RAIF?
Investment is reserved to well-informed investors. This includes institutional and professional investors. Another investor can qualify by confirming that status in writing and either investing at least EUR 100,000 or obtaining an assessment of its expertise, experience and knowledge from an eligible professional.
Does a RAIF need CSSF approval?
No. There is no product approval before launch and no direct CSSF supervision of the RAIF. The authorised AIFM is supervised, and the RAIF must still appoint the service providers and meet the disclosure, audit and operating rules set by law.
What tax applies to a standard RAIF?
The standard RAIF regime is based on an annual subscription tax of 0.01% of net assets, calculated quarterly, with statutory exemptions. Other Luxembourg direct taxes do not apply at fund level under that regime, and distributions are not subject to Luxembourg withholding tax.
What is the RAIF risk-capital option?
A RAIF that invests exclusively in risk capital can elect a separate tax regime in its constitutive documents. It is not subject to subscription tax. Its direct-tax treatment then depends in part on its legal form.
