SCSP

Luxembourg introduced the Special Limited Partnership (“SCSp”) on July 12, 2013, inspired by the Anglo-Saxon “limited partnerships” model. Non-regulated or regulated vehicles (such as Specialized Investment Funds and Venture Capital Investment Companies) may be structured as an SCSp.

This new framework offers greater legal flexibility due to substantial contractual freedom and tax transparency. It was especially designed to meet the needs of venture capital and private equity firms.

• The SCSp has no legal personality and no minimum share capital. It can be established either by notarial deed or private deed
• It must have at least two legally distinct partners. The general partner is jointly and severally liable for the partnership’s debts, while the limited partner is only liable up to the amount of their contributions
• It does not need to disclose the identity of limited partners or their contributions
• Partners must provide contributions (in cash, kind, or services), and a partner’s interest in the partnership is represented by interest shares received in exchange for contributions

Non-regulated partnerships are generally exempt from IF (wealth tax), IRC (corporate tax), and ICC (municipal business tax). The SCSp is fiscally transparent, and partners are taxed according to their personal tax regime.

Dividends, interest, and royalties paid to residents and non-residents are exempt from withholding tax.

However, the SCSp does not benefit from Luxembourg’s double taxation treaties but can benefit from those of the limited partner’s country of residence. Exceptionally, profits of the SCSp may be subject to ICC (Luxembourg rate of 6.75%) if:

• A Luxembourg capital company general partner holds at least 5% of the SCSp, or
• The SCSp also engages in commercial activity