Regulated by law June 15, 2004. This vehicle is subject to approval by the Commission de Surveillance du Secteur Financier (CSSF). The supervision by the CSSF includes the constitutional documents, administrators, the choice of depositary, auditor choice and administration headquarters.
SICAR administrators and the depositary must have sufficient experience in the execution of their duties in the field of private equity in relation to the investment policy of the SICAR.
The CSSF must approve: SICAR statutes, the prospectus, the service delivery contracts and its amendments. The approval is conditional on proof that the depositary and the central administration of SICAR are situated in Luxembourg.
​SICAR (Société d’Investissement à Capital Risque) in compliance with the Law of Luxembourg of 15th June 2004 and its amendments of 15th October 2008:​
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- Type of Fund: Limited life-time SICAR (Société d’Investissement à Capital Risque) in compliance with the Law of Luxembourg of 15th June 2004 and its amendments of 15th October 2008.
- Duratión: unlimited.
- Legal Form: Société par Actions (S.A.) qualified as a SICAVSA with variable capital.
- Structure: «UMBRELLA STRUCTURE» with multiple compartments (initially with an active compartment) allowing reducing the administrative costs, etc.​
- Intermediary entities: Possessing entities are special purpose vehicles (SPV-special purpose vehicle) (Spain) and a holding company in Luxembourg for which audited financial situations will be available at least once a year.
​THE COMPARTMENT
• Each compartment is considered as an independent structure in which the distribution of rights and obligations is due to investors' participations related to it.
• The rights and obligations of investors in each compartment of the structure are considered apart from the other compartments of the structure.
• Regarding contractual commitments on the set of a compartment structure SICAR on third parties, only the real values and goods of the compartment concerned will be ensured (assets of such Compartment).
​REASONS FOR USING A SICAR IN FIELD OF SPANISH RISK CAPITAL.
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a) Investors based in tax havens. Suppose we are founding Spanish venture capital equity (ECR), but some of investors are residents in tax havens. To be subject to taxation of ECRs, investment can be done through a jurisdiction known to international investors, such as of Luxembourg. It is thus a "feeder fund" in Luxembourg and only for these investors. The "feeder fund", in turn, invests in Spanish ECR.
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b) b) When the investment objective does not meet the diversification limits required for Spanish ECRs in Articles 17-25 of Law 25/2005, 24 November, the regulator of the venture capital entities and their management companies. SICAR is used as an alternative because it is not subject to any obligation of diversification.
c) When the type of investment does not fit the purpose of the venture capital stipulated by Law 25/2005, 24 November, the regulator of the venture capital entities and their management companies. This circumstance has occurred in the constitution of mezzanine funds in Spain.
d) To make investments in real estate companies or real estate. It is one of the assumptions that, in general, stay outside of the corporate purpose of the Spanish ECRs.
Once again, a SICAR is an alternative because it allows investment in real estate funds always when it is in compliance with the requirement of investment development as a purpose.
​CONCLUSIONS.​
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A good tax treatment, a flexible legal regime and familiarity achieved by this jurisdiction among institutional investors are the reasons why Luxembourg is one of the major international financial centers.
Luxembourg vehicles are used both for investing in Spanish venture capital equities and to constitute equity funds in Luxembourg or facilitate investment in Spain by international funds. The vehicles used are the SICAR and SOPARFI.