Green investment funds in Luxembourg refer to types of vehicles which are specifically designed for investing in various projects that are environmentally friendly.
If you want to open a Luxembourg fundthat develops green investments, the most suitable investment vehicles are mutual funds and exchange traded funds.
Our team of financial advisorscan offer in-depth details on how to register any vehicle that is suitable for green investments, and you can also find out from our consultants the legislation and all the policies aiming at the improvement of environment through various financial investments.
What are exchange traded funds in Luxembourg?
An exchange traded fund (EFT) is a type of fund that can be listed on the Stock Exchange and which can invest in a wide category of assets, including bonds and shares and which, as mentioned earlier, can be used as a vehicle for green investment funds in Luxembourg.
The ETF can be set up by institutional and retail investors and such funds have the following characteristics:
1. diversification;
2. liquidity;
3. transparency;
4. low costs.
If you will open an investment fund in Luxembourg as an ETF, you must know that the assets of the funds can be traded during the trading day (known as intra-day) as opposed to other types of funds, which can only be traded at the end of the trading day.
What other types of vehicles can be used for green investment funds in Luxembourg?
Luxembourg is the leading jurisdiction in the financial industry, as the country provides a wide category of funds, a solid legal framework and a long history when it comes to investment vehicles (it is the 1st country that has created an investment fund).
Therefore, those who want to open an investment fund in Luxembourg have many options in this sense. Below, our consultants present some investment vehicles that can be used for green investments:
1. UCITS (undertakings for collective investments in transferable securities);
2. SIF (specialized investment funds);
3. SICAR in Luxembourg (investment company in risk capital);
4. RAIF (reserved alternative investment fund).
Green investments policies in Luxembourg
Luxembourg invests massively in green developments. It has started receiving funding from the European Commission (EC) since 2021, under the Cohesion Policy, which aims at improving key aspects of society, such as green transition, employment, social services, innovation, etc.
Some highlights of the green policies in Luxembourg are presented below and they can be used as incentives for investing in green investment funds in Luxembourg:
- Luxembourg will receive EUR 67 million in the period of 2021-2027;
- out of these, EUR 23 million will be obtained from the European Regional and Development Fund for the reduction of carbon emissions in constructions and transportation;
- in 2016, the Luxembourg authorities created the Luxembourg Green Exchange, a platform for green securities, following the goals established during the Paris Climate Agreement;
- in 2021, the platform accounted for more than 1200 securities with a total value of EUR 640 billion;
- the platform stands out as the 1st platform of this type (when referring to the listed bonds).
How long does it take to open a Luxembourg fund?
The duration of the registration process can vary based on the type of fund investors will select and the minimum legal requirements imposed to that type of fund. In general, the registration can take minimum 2 weeks and can go up to 2 months.
Our team of financial advisors can help you prepare the required documentation so that the registration process can be completed as soon as possible. Our consultants will help you gather all the paperwork, obtain licenses and permits (if required for green investment funds in Luxembourg), complete any formalities with the Luxembourg authorities, etc.
Contact us now for more information on how to set up green investment funds in Luxembourg.