The Alternative Investment Fund Manager (AIFM) refers to the entity that is entitled to manage the assets and the investment schemes of alternative investment funds (AIFs). There are certain procedures that must be met in order to become Alternative Investment Fund Manager (AIFM) in Luxembourg, which can be detailed by our team.
| Quick Facts | |
|---|---|
| National law on AIFM in Luxembourg |
Law of 12 July 2013 on Alternative Investment Fund Managers (AIFM) in Luxembourg |
|
AIFM supervision (yes/no) |
Yes |
|
Regulatory body |
Commission de Surveillance du Secteur Financier (CSSF) – Financial Sector Supervisory Commission |
| AIFM – main responsibilities |
The role of Alternative Investment Fund Managers (AIFM) in Luxembourg is: – to ensure compliance with the current law and regulations applied to the investment fund, – to offer management services, – to provide investment advice etc., in accordance with the level of expertise. |
| Legal structure for AIFM |
The AIFM must work under a business form accepted under the Luxembourg law. |
| What is the AIFM passport? |
The passport is a legal instrument which grants the right of a fund in Luxembourg to be marketed to other jurisdictions and vice versa. |
| AIFM license required (yes/no) |
Yes, in most cases (exemptions are available) |
| When can foreign AIFMs operate in Luxembourg? |
They can operate in Luxembourg after CSSF reviews their documentation. |
| European law on AIFM |
Alternative Investment Fund Managers Directive 2011/61/EU |
| Types of investment funds to which the AIFM law is applied |
– alternative investment funds, – specialized investment funds, – investment companies in risk capital, – reserved alternative investment funds, etc. |
| Reporting obligations of AIFMs in Luxembourg |
The reporting obligations vary based on the category of the Alternative Investment Fund Managers (AIFM) in Luxembourg – registered AIFMs or authorized AIFMs (the latter have more complex reporting obligations to the CSSF). |
| Passport coverage for AIFMs |
The member states of the European Union (EU) and the European Economic Area (EEA) |
| Example of highly regulated AIF vs. unregulated fund |
– highly regulated – the SICAR, – unregulated – the RAIF |
| Most popular fund for AIF in Luxembourg | RAIF |
| Advantages of the RAIF in Luxembourg |
– reduced registration period (maximum 3 months), – no authorization required, – diversification portolios allowed, – it benefits from the European passport, – it can be registered as an umbrella fund, – low subscription tax |
When did the AIFM Law became applicable in Luxembourg?
The AIFM Law entered into force on 15th of July 2013, as a transposition of the European Union’s Alternative Investment Fund Manager Directive (AIFMD).
What does the AIFM Law regulate?
Below, our team of financial advisors has prepared a short description on the purposes of the AIFM in Luxembourg:
- through this law, all fund managers of AIFs are required to be authorized for this function;
- the law covers the manner in which managers have to report to the fund’s investors;
- it also regulates management procedures and the administration of the fund;
- the primary aspect covered by the law is the manager of AIFs, and only then the AIFs;
- the law is also applicable to the common fond, and the AIFM authorization must be done in the name of the fund.
Are there any new legislative updates?
Yes, since the implementation of the 2013 law on AIFMs, it must be noted that the Luxembourg authorities have updated the legislation. This has recently happened (as of April 2026) under the approval of the AIFMD II (Directive 2024/927).
What are the new measures taken under the AIFMD II?
Some of the main amendments of the AIFMD II are:
- the new law transposes the latest EU directives on AIFMs and they are applicable in Luxembourg starting with 16th of April 2026;
- in the case of AIFMs that manage open-ended AIFs it is required to implement at least 2 liquidity management tools;
- the legislation expands the list of management services that can be provided by management companies;
- the new law also establishes that AIFs incorporated as common funds or special limited partnerships can now operate with multiple compartments;
- it must be noted that there are new substance requirements which obligates the AIFM to have at least 2 full-time employees (they must be EU residents);
- starting with 2027, new rules will apply to the AIFM (our financial specialists can provide more information on the upcoming legal measures).
What are the responsibilities of an AIFM in Luxembourg?
Some of the responsibilities of the AIFM are listed below:
- the AIFM in Luxembourg is represented by a person who has an in-depth knowledge of the financial sector, laws and regulations, and who is able to provide management services that will increase the value of an investment vehicle;
- the main activities of an AIFM in Luxembourg refer to developing portfolio management services and risk management services;
- the responsibilities of a manager can also include marketing or administrative activities.
How many AIFMs are necessary for an AIF?
The legislation stipulates that the AIF can be managed by 1 AIFM.
What types of AIFMs can a fund appoint?
There are 2 main types:
- external (registered in Luxembourg, EU states or third party countries that are authorized as per the rules of the Directive 2011/61/EU);
- internal (provided that the legal form of the AIFs allows an internal management structure).
Is the AIFM required to obtain approval for its operations?
The entity must be approved by the Financial Sector Supervisory Commission (CSSF).
Does the AIFM need to be organized under a legal entity?
It is also important to know that the AIFM in Luxembourg has to work under a legal entity. Management activities can’t be carried out by natural persons.
In the infographic below, you can observe some of the AIFM regulations in Luxembourg:
Are there any capital requirements for AIFMs?
Yes. If you want to become an AIFM in Luxembourg, please know that you need to satisfy certain capital thresholds, as follows:
- internal AIFM – the minimum capital requirements are EUR 300,000;
- external AIFM – the legal entity must have a minimum capital of EUR 125,000.
What is an AIF passport?
With the implementation of the AIFMD in Luxembourg, managers of AIFs can market a fund registered in this country to another EU member state through a single type of authorization, which is known as a passport (or vice versa).
What are the main steps for obtaining an AIFM passport?
Some of the main steps are described below by our team:
- in order to have passport rights, the AIFMs must first be authorized in their home country. If an AIFM located in another EU/EEA state wants to provide management services for an AIF in Luxembourg, then this right will be provided as long as there are sufficient documents that can attest the authorization;
- the AIFMs need to address to the financial regulators in their home country, by sending an official notification with regards to their intention to exercise passport rights in Luxembourg, for the purpose of marketing a fund to investors located here;
- the competent authority of the respective country will address the CSSF, and send the necessary documents with regards to the passport of the AIFM. CSSF will charge a fee for marketing foreign AIFs in Luxembourg, which are registered in EEA states.
We invite you to watch a video presenting how to register an AIFM in Luxembourg:
Please contact our financial specialists if you need further information on the law regulating Alternative Investment Fund Managers (AIFM) in Luxembourg.