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Set up Securitization Vehicles in Luxembourg

Set up Securitization Vehicles in Luxembourg

The main law governing the establishment securitization vehicles in Luxembourg was enabled in 2004. The Securitization Law provides for a company to carry out business transactions through a special purpose vehicle (SPV) which will assume the risks from the receivables. The securitization company must issue securities which must have the same value of the risks assumed. The financing of the Luxembourg company will derive from the issued securities.

Our Luxembourg lawyers can provide you with more information on the Securitization Law.

Types of securitization vehicles in Luxembourg

Foreign investors interested in establishing a fund under the Securitization Law in Luxembourg can choose between two types of vehicles:

  • –          the securitization company;
  • –          the securitization fund.

The company can be incorporated as a private or public limited company, partnership limited by shares or cooperative. On the other hand, the securitization fund will be set up as trust assets with no legal personality. However, it must be managed by a trading company in Luxembourg.

Requirements for using a Luxembourg securitization vehicle

The requirements for setting up a securitization vehicle in Luxembourg will depend entirely on the type of structure preferred by the investor. Securitization companies are subject to the same criteria imposed by the Commercial Code for other business forms:

  • –          limited liability companies will be required to have a minimum share capital of 12,500 euros;
  • –          public companies will have a minimum share capital of 31,000 euros.

There are no capital requirements for securitization funds. The management company must, however, fulfill the same criteria above depending on its structure.

Registering a securitization vehicle in Luxembourg

Securitization companies will be registered with the Luxembourg Trade Register based on their Articles of Association, while securitization funds will be set up before a notary who will draft an agreement. Both types of securitization vehicles will fall under the supervision of the Supervisory Commission of the Financial Sector in Luxembourg (CSSF).

Securitization vehicles offer good returns and are considered stable investments. If you want to set up a securitization company or fund in the Grand Duchy, do not hesitate to contact our law firm in Luxembourg.