SCSp Luxembourg

Luxembourg is known for its investment funds, and one legal form keeps coming up when advisers describe how those funds are structured: the société en commandite spéciale, or SCSp.

A young form with a familiar shape
The SCSp was created by the law of 12 July 2013. It is modelled on the Anglo-Saxon limited partnership, which investors, fund managers and their lawyers already know. That familiarity lowers the cost of explaining the structure to international investors, and it is one of the main reasons advisers give for choosing it.

Why practitioners choose it

• Contractual freedom. The limited partnership agreement sets out the partners’ rights, voting rules, distributions and transfers. The law prescribes only a few compulsory provisions, so the structure can be shaped to the deal.
• No minimum capital. There is no statutory capital requirement, and commitments are set in the agreement.
• Speed. It is formed by agreement, which can be signed under private seal with no notary needed. Advisers describe a typical set-up of two to four weeks once the agreement is settled.
• Confidentiality. Only an extract is published in the RESA. The economic terms of the agreement stay private.
• Tax transparency. For corporate income tax and net wealth tax, tax generally arises at the level of the partners, not the partnership. That also helps investors claim treaty benefits.

Where it is used
Advisers most often cite private equity, venture capital and real estate, along with debt and other illiquid strategies. The same flexibility suits master-feeder structures, co-investment vehicles and carried-interest arrangements. Luxembourg’s 2026 carried interest regime, taxing contractual carried interest at a reduced rate, adds to its appeal for managers.

What to watch
The SCSp has no legal personality of its own, so the general partner acts on its behalf and carries unlimited liability. That is why the general partner is usually a limited-liability company. A limited partner’s liability is capped at its commitment, but that protection is lost if the limited partner manages the partnership towards third parties.

Tax needs care too. Municipal business tax can apply if the partnership carries on a commercial activity, or if a corporate general partner holds 5% or more of the interests. Anti-hybrid and reverse-hybrid rules also deserve attention for cross-border investors.

The register is stricter than before. Since the law of 23 January 2025 came into force on 1 February 2025, the LBR screens filings before accepting them and can enforce late filings with fines.

The takeaway
The SCSp offers flexibility, speed and discretion, with a legal form investors already understand. It is not a one-size-fits-all vehicle, so the structure, the liability of the general partner and the tax position should be checked before you form one.

Contact us to discuss your SCSp in further details.

This article is general information, not legal or tax advice.