Investment company ”SICAR”
A SICAR is considered a corporation (typically referred to here as SA), the purpose of which is to deposit its funds in risk assets, in order to distribute the profits as compensation for the carried risk to “knowledgeable investors“.
Legal aspects
- Headquarters and main administrative office of the SICAR must be located in Luxembourg.
- The listed corporate capital amounts to one million EUR.
- The issuance of new shares is simplified.
- The assessment of assets takes place according to the prospective sales value.
- A minimum reserves accumulation is not required by law.
- Re-payments and dividend payouts can be freely disbursed.
- Risk taxation is not required by law.
Depository bank
Assets must be transferred to a depository bank (lending institution) headquartered in Luxembourg, which then ensures that:
- The list price of company shares is received within the3 deadline;
- That in transaction involving material assets, the compensatory value is transferred or paid;
- That revenues are applied to a purpose in compliance with the articles of incorporation.
The depository bank is independent and acts exclusively in the best interest of investors.
Oversight / Control
- The SICAR is subject to mandatory certification by the oversight board for financial markets.
- A simplified certification procedure is in place following the check of the establishment documentation and the selection of the depository bank.
- The management board and the depository bank must provide verification of experience in the ”Private Equity“ sector.
- A ”Sponsor / Promoter“ is not required.
- Listing on the stock exchange is permissible according to the company’s legal form.
Reporting and Auditing
- Prospectus required by law.
- Annual reports must be generated within six months of the transaction.
- No obligation to balance-sheet consolidation.
- Invoice data subject to auditing requirement.
Taxation of SICAR:
- Capital transactions tax: EUR 1,250.00
- General tax obligation: 29.63%
- Not subject to property tax
- Here, “box“ privilege applicable
- In principle, no DBA restrictions
- Dividend payouts not subject to withholding tax
- Administrative services are VAT-exempt
- Revenues generated from securities are tax-exempt
- Liquidation profits are tax-exempt (for non-resident shareholders)
This instrument is only suitable for professional (institutional) investors, such as banks and insurance companies.
