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SICAV in Luxembourg: what it is, advantages and who it is for
The SICAV is one of the flagship vehicles of the Luxembourg investment industry. Luxembourg is the second-largest fund domicile in the world, and the SICAV is the preferred legal form for structuring a large part of that wealth.
What a SICAV is
SICAV stands for Société d'Investissement à Capital Variable — an investment company with variable capital. Its purpose is to invest the wealth of its shareholders collectively and in a diversified way. Its capital is variable: it grows when investors come in and shrinks when they leave, without amending the articles of association.
In Luxembourg, SICAVs can be structured as UCITS funds (harmonised at European level and open to retail investors) or under regimes aimed at qualified investors, depending on the target audience.
Advantages of a Luxembourg SICAV
- Professional, diversified management of wealth.
- A structure recognised and marketable across the entire European Union.
- The possibility of several sub-funds under a single umbrella company.
- A robust regulatory framework supervised by Luxembourg's CSSF.
- Multi-currency operations and share classes tailored to each profile.
SICAV versus investment fund
The difference is essentially legal: in a fund, the investor holds units of a managed pool of assets; in a SICAV, they hold shares of a company. For the end investor the experience is very similar — diversification, professional management and liquidity — but the SICAV adds corporate flexibility and, in bespoke structures, control over the investment policy.
Who it makes sense for
Investing in existing SICAVs is within reach of any private banking client. Setting up your own sub-fund within a SICAV, on the other hand, is a solution for substantial estates seeking a tailor-made structure for their family or business group.
Frequently asked questions
What is a SICAV in Luxembourg?
A SICAV (investment company with variable capital) is a collective investment vehicle in corporate form, whose capital rises or falls with subscriptions and redemptions. In Luxembourg it is one of the structures most widely used by the fund industry.
How does a SICAV differ from an investment fund?
A fund is a pool of assets without legal personality, managed by a management company; a SICAV is a company with its own legal personality in which the investor is a shareholder. In practice, both allow you to invest in a diversified, professional way.
How much wealth do I need for my own SICAV sub-fund?
Creating a bespoke sub-fund within a SICAV usually requires substantial amounts (from several million euros upwards). For most investors, the usual route is to invest in existing SICAVs through private banking.
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