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- then the SOPARFI falls within the scope of theAIFM Law. However, if the entirety of the sharesof the SOPARFI is held by a single shareholder,the SOPARFI would not be considered an“alternative investment fund” under that Law, assuch definition requires the raising of capitalfrom a “number of investors.” Hence, aSOPARFI can be structured to avoid theapplication of the AIFM Law.B. SECURITISATION VEHICLES1. The 2004 Securitisation LawThe Luxembourg Securitisation Law of 22March 2004 (“Securitisation Law”) is generallyconsidered one of the most attractive regimesfor securitisations in Europe, permitting a verybroad range of assets to be securitised througheither a regulated (by the CSSF) or unregulatedstructure. The unregulated structures enjoysubstantial cost savings, as very few filings arerequired.2. Definition of a Securitisation under the2004 Securitisation LawThe 2004 Securitisation Law defines asecuritisation as a transaction by which a“securitisation undertaking” assumes, directly orthrough another undertaking, risks relating toclaims, other assets, or obligations assumed bythird parties or inherent in all or part of theactivities of third parties, and issues securities,whose value or yield depends on such risks".The possibility for the securitisation vehicle toacquire a very broad range of underlying assetsmakes this vehicle very attractive for investmenttransactions. The CSSF considers both thestructure of the transaction and the origin of therisk when considering whether a transactionqualifies as a securitisation undertaking. Thespecific examples of assets provided for by theCSSF include loan portfolios, goods andequipment, and the securitisation of shares ininvestment funds, hedge funds, and companies.The main funding source of a securitisationundertaking must come from the issuance ofsecurities.3. Securitisation CompaniesLuxembourg securitisation vehicles in corporateform may be organised as a public limitedcompany (société anonyme), a corporatepartnership limited by shares (société encommandite par actions), private limited liabilitycompany (société à responsabilité limtée), or acooperative company (société coopérativeorganised as a société anonyme).4. Securitisation FundsSecuritisation funds have no status as a legalentity. Rather, they constitute a pool of assetsmanaged by a management company.They can take the form of either (i) a coownershipof assets (copropriété) where theinvestors have a right in rem to the relevantunderlying assets or (ii) a fiduciary propertywhere the management company holds theunderlying assets as such (and segregated fromits other assets).5. Creation of Multiple CompartmentsThe Securitisation Law allows the setting-up ofsecuritisation vehicles with multiplecompartments that can be efficiently “ringfenced”by an effective segregation of assets asregards investors' and creditors' rights.6. Issuance of Debt and Equity SecuritiesA securitisation vehicle may in principle issueany kind of transferable debt or equitysecurities. It is not unusual for a securitisationvehicle (whether regulated or unregulated) to listits debt in Luxembourg.7. Regulated or UnregulatedSecuritisation VehiclesSecuritisation vehicles that issue securities (i) tothe public and (ii) "on a continuous basis" areregulated by the CSSF. Only if both conditionsare met does the vehicle fall within theregulatory oversight of the CSSF.However, the great majority of Luxembourgsecuritisation vehicles remain unregulated, asno issuance of securities to the public takesplace in most cases.8. Bankruptcy RemotenessThe Securitisation Law ensures bankruptcyremoteness by expressly recognising the validityof non-petition clauses, as well as limitedrecourse and subordination clauses. Suchclauses are typically found in the Articles ofIncorporation and/or the offering document ofthe securitisation vehicle.9. Tax TreatmentSecuritisation companies are subject tocorporate/municipal income tax, which currentlyamounts in the aggregate to 29.22%. However,the Securitisation Law allows the deduction fromincome of all commitments vis-a-vis investorsand creditors.Securitisation vehicles organised as funds arenot subject to (i) income tax, (ii) subscription tax(which distinguishes it from investment funds),or (iii) net worth tax.Currently, distributions made by securitisationvehicles to their investors and creditors areexempt from Luxembourg withholding tax(subject to the provisions of the EU Directive on6