Published by World Commerce Review, April 2008.

It has now been a year that Luxembourg has created a new investments structure by the law of 13 February 2007 on specialised investment funds (the SIF Law). Luxembourg had already organised institutional funds under the law of 19 July 1991 (the 1991 Law), but thought it was about time to improve its efficiency. It has therefore reinvented a regime on the basis of some provisions governing traditional undertakings for collective investment governed by the law of 20 December 2002 (the 2002 Law) and the legal and regulatory regime applicable to investment companies in risk capital governed by the law of 15 June 2004. This has resulted in a lightly regulated, operationally flexible and fiscally efficient multipurpose investment fund regime for an international qualified investor base. Success of this structure has been huge so far since 416 of these funds  (SIF) have been established in Luxembourg, in addition to the 222 already existing under the 1991 Law, which were automatically converted as SIFs. This article will briefly review the main reasons of this success.