Luxembourg SCS and SCSp Formation

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Luxembourg SCS and SCSp Limited Partnerships

Luxembourg offers two principal limited partnership vehicles widely used in the international private equity, alternative investment, and real estate fund market: the Societe en Commandite Simple (SCS) and the Societe en Commandite Speciale (SCSp). The SCS is a limited partnership with legal personality, requiring at least one general partner with unlimited liability and at least one limited partner with liability capped at their capital commitment. The SCSp is a special limited partnership without legal personality, meaning its assets and liabilities belong jointly to the general partner and the limited partners in proportion to their respective partnership interests. The SCSp does not require formation by notarial deed, making it simpler and less costly to establish than comparable Luxembourg corporate structures.

Both the SCS and the SCSp are tax transparent vehicles for Luxembourg income tax purposes, meaning the partners rather than the partnership entity itself are subject to taxation on the income and gains of the vehicle. The SCSp is particularly popular in the private equity fund context because of its lack of legal personality, its tax transparency, its maximum contractual flexibility, and its strong recognition among institutional investors globally. For the SCSp to operate as a Luxembourg alternative investment fund, it must be managed by an authorised Alternative Investment Fund Manager (AIFM) and may benefit from the full EU AIFMD marketing passport across EU member states.

SCSp Tax Transparency

The Luxembourg SCSp is tax transparent and has no separate legal personality, meaning income and gains flow directly to the partners and are taxed at the partner level rather than within the vehicle itself, providing full tax efficiency for international fund structures.

No Minimum Capital

Neither the SCS nor the SCSp is subject to a minimum capital requirement in Luxembourg, providing maximum flexibility in structuring fund capital commitments and partner contributions at any level appropriate to the specific fund strategy and investor base.

Private Equity and Fund Use

The Luxembourg SCSp has become the vehicle of choice for private equity, real estate, infrastructure, and alternative investment funds globally, with thousands of registered SCSp vehicles used by major international fund managers investing across all asset classes.

Alternative Investment Fund Manager Directive Compliance

Luxembourg SCSp structures used for regulated alternative investment funds must be managed by an authorised AIFM and comply with all AIFMD requirements including disclosure, risk management, annual reporting, and depositary appointment obligations.

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