SICAR - Investment Company in Risk Capital

The investment company in risk capital (Société d’investissement en capital à risque – SICAR) is a regulated, fiscally efficient structure designed for private equity and venture capital investments. There are no investment diversification rules, nor lending or leverage restrictions.


An investment into a SICAR is restricted to “well-informed” investors. This term comprises:
  • institutional investors;
  • professional investors;
  • and other investors who confirm in writing that they adhere to the status of “well-informed” investors and who either (i) invest a minimum of EUR 125,000 or (ii) have been assessed by a credit institution, an investment firm or a management company which certifies the investors’ ability to understand the risks associated with investing in the SIF.


There is no need to appoint an initiator/promoter to launch the SICAR. But if the SICAR has an initiator/promoter, the latter is not subject to a minimum capital requirement or to authorisation by the CSSF.

Legal framework

Law of 15 June 2004 relating to the risk capital investment company (Société d’investissement en capital à risque)
CSSF Circular n° 06/241: The concept of risk capital under the Law of 15 June 2004 relating to the investment company in risk capital (SICAR) 

Eligible assets and risk diversification requirements

SICARs may only invest directly or indirectly in securities that represent risk capital. Risk capital consists mainly of high risk investments made in view of their launch, development or listing on a stock exchange. The SICAR may also marginally hold financial derivative instruments on an exceptional basis. Temporary investment in other assets is allowed pending they qualify as investment in risk capital.
There are no risk diversification requirements and the risk management function is not regulated. 

Legal form

A SICAR may take one of five possible legal forms:
  • société anonyme (SA) – public limited company;
  • société à responsabilité limitée (Sàrl) – private limited company;
  • société en commandite par actions (SCA) – partnership limited by shares;
  • société coopérative organisée comme une société anonyme (SCoSA) cooperative company organised as a public limited company;
  • société en commandite simple (SCS) – limited partnership.
These different entities may be set up as a single fund or as an umbrella fund consisting of multiple compartments, each with a different investment policy. The fund and compartments may have an unlimited number of share classes, depending on the needs of the investors to whom the fund is distributed. 

Capital requirement

If the SICAR is incorporated as 
  • a public limited company (SA) or a partnership limited by shares (SCA), the SICAR must have a minimum capital of EUR 31,000 upon incorporation;
  • a private limited company (Sàrl), the SICAR must have a minimum capital of EUR 21,500 upon incorporation.
Subscribed share capital including share premiums must reach EUR 1,000,000 within twelve months of authorisation.

Authorisation and supervision

As a regulated vehicle, the SICAR must be approved and is supervised by the CSSF. An authorisation file must be submitted to the CSSF within the month following the creation of the SICAR. The authorisation will be granted subject to:
  • approval of the articles or management regulations;
  • approval of the choice of depositary bank and auditor;
  • notification of the directors of the SICAR or managers of the management company.
The SICAR must report to the CSSF twice a year.


SICARs do not benefit from a European passport.


SICARs are not subject to subscription tax.
In terms of income tax, there is a tax exemption for income derived from transferable securities and for one year for income on cash held for the purpose of a future investment. The remaining income is subject to the ordinary income tax of 28.59%.
A fixed capital duty which was payable on incorporation was abolished as from 1 January 2009.

Service providers

  • Depositary bank:

SICARs must appoint a credit institution as depositary bank, which is responsible for both the safekeeping of assets and the supervision of the fund and its management company.
The individuals who represent the depositary bank must be of good repute and have sufficient experience in the performance of their functions in the private equity field.
  • Central administration:

The central administration of a SICAR must be in Luxembourg, but certain functions may be outsourced to a third party for the purpose of a more efficient conduct of business. This concerns the accounting, NAV calculation, keeping of the register of shareholders/unit holders, handling of subscriptions and redemptions, communication with investors and preparation of financial statements.
The directors of the SICAR must be of good repute and have sufficient experience in the performance of their functions in the private equity field.
  • External Auditor:

The SICAR prepares an annual report which is audited by an authorised external auditor with appropriate professional experience. There is no obligation to produce a semi-annual report.
Updated on 24/01/13  
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