Luxembourg continues to stand as one of the most attractive jurisdictions in Europe for launching alternative investment funds . Among the flexible fund structures available, the Reserved Alternative Investment Fund (RAIF) stands out for its fast time-to-market and investor-friendly regulatory environment. In this comprehensive guide, we explain exactly how to set up a RAIF fund in Luxembourg in just six weeks , breaking down every necessary step, timeline, and legal requirement.

What Is a RAIF and Why Choose Luxembourg?

The Reserved Alternative Investment Fund (RAIF) is a unique legal structure introduced in 2016, designed to combine the flexibility of unregulated investment funds with the security and marketing advantages of regulated alternatives. While a RAIF itself is not supervised directly by Luxembourg's CSSF (Commission de Surveillance du Secteur Financier) , it must be managed by an authorized Alternative Investment Fund Manager (AIFM) , ensuring compliance with AIFMD regulations.

Choosing Luxembourg provides RAIF promoters with:

  • A strong legal and regulatory infrastructure

  • Access to the entire EU investor market via passporting

  • Tax efficiency and structuring flexibility

  • Speedy setup compared to traditional SIF or SICAR structures

Key Features of a Luxembourg RAIF

  • Legal Forms : SCS, SCSp, SCA, SA, Sàrl, etc.

  • Eligible Investors : Well-informed investors only

  • No CSSF Pre-Approval : Faster time to market

  • Minimum Capital : €1.25 million (to be reached within 12 months)

  • Tax Regime : SIF-like (exempt from income tax, subject to subscription tax)

  • Management : Requires an EU-authorized AIFM

Step-by-Step Process to Launch a RAIF Fund in 6 Weeks

Week 1: Preliminary Planning and Structuring

During the first week, we collaborated closely with our clients to define:

  • Investment strategy

  • Asset class (private equity, real estate, infrastructure, etc.)

  • Target investors

  • Jurisdictional structure

  • Legal form selection (eg, SCSp for tax transparency)

We also begin discussions with a licensed AIFM , depositary, administrator, and auditor.

Week 2: Service Provider Engagement and Documentation Kick-Off

By week two, we initiate:

  • Engagement letters with:

    • AIFM

    • Depository bank

    • Fund administrator

    • Auditor

  • Preparation of the RAIF Offering Memorandum (PPM)

  • Drafting of the Limited Partnership Agreement (LPA) or other constitutional documents

  • Collection of KYC documents for all stakeholders

  • Confirmation of the fund's investment restrictions and risk policies

Week 3–4: Legal Drafting and Entity Incorporation

Over the next two weeks, the focus is on documentation and legal setup:

  • Finalization of:

    • LPA or articles of incorporation

    • Offering Memorandum

    • Management agreements

  • Incorporation of the legal entity with the Luxembourg Trade and Companies Register (RCS)

  • Subscription of initial capital

  • Appointment of board members and AIFM

The notary is engaged for formal incorporation procedures, especially for entities like SA or Sàrl .

Week 5: Onboarding, Operational Readiness, and Notifications

At this stage, the operational backbone is activated:

  • Bank accounts have been opened

  • Onboarding with the fund administrator is finalized

  • AIFM files the Annex IV report notification with the CSSF

  • AML/CFT checks are completed by all service providers

  • Distribution strategy and marketing materials are prepared

Once the fund is operationally ready, it can start marketing under AIFMD passporting across the EU.

Week 6: Launch and Investor Onboarding

In the final week, the RAIF fund is officially launched . Key actions include:

  • Upload of final documents to internal investor portals

  • Investor subscriptions begin

  • Issue of capital call notices if applicable

  • First investments executed (optional)

  • Setup of regular NAV calculations and reporting cycles

The fund is now live and operating, offering investors a fully compliant, EU-distributable investment vehicle.

RAIF vs SIF vs SICAR: Why RAIF Wins on Speed and Flexibility

Feature RAIF SIF SICAR
CSSF Supervision No Yes Yes
Time to Market 4–6 weeks 3–6 months 3–6 months
Minimum Capital €1.25 million €1.25 million €1 million
Taxation SIF regime SIF regime Partially taxable
Legal Flexibility High Moderate Moderate

Costs Involved in Setting Up a RAIF

Setting up a RAIF involves one-time and recurring costs, including:

  • Legal and structuring fees : €30,000–€60,000

  • AIFM and Depositary : €25,000–€80,000 annually

  • Fund Administration : €20,000–€50,000 per year

  • Audit and reporting fees

  • Luxembourg subscription tax : 0.01% pa on NAV (some exemptions apply)

The total setup and annual running costs depend heavily on the complexity, number of sub-funds, and investment strategy.

Why Work With FundSetup.net for Your RAIF Launch

At FundSetup.net , we specialize in turnkey fund structuring solutions in Luxembourg. With deep legal, regulatory, and operational expertise, we ensure:

  • Speed : Launch in as little as 4–6 weeks

  • Compliance : Full alignment with AIFMD and Luxembourg law

  • Connections : Access to pre-vetted AIFMs, depositaries, and auditors

  • Customization : Tailored fund solutions to your investment thesis

Ready to Launch Your Luxembourg RAIF?

Launching a RAIF in Luxembourg is a strategic move for fund managers and institutional investors seeking speed, flexibility, and pan-European access. With our professional support, the process can be seamless, compliant, and ready for deployment within six weeks.

Start your fund journey today with FundSetup.net.