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3. Business OrganisationLike most Luxembourg regimes, the SPF is nota type of company, but, rather, an electedstatus, which must appear in the company'sArticles of Incorporation. An SPF, whoseregistered office must be in Luxembourg, maytake any of the following forms: public limitedcompany (société anonyme), private limitedliability company (société à responsabilitélimitée), partnership limited by shares (sociétéen commandite par actions), or a cooperative inthe form of a public limited company (sociétécoopérative sous forme de société anonyme).4. Eligible InvestorsInvestors that are permitted to hold shares in anSPF are the following: (i) individuals acting inthe context of the management of their privatewealth, (ii) wealth management entities actingexclusively in the interest of the private wealth ofone or more persons, and (iii) intermediariesacting on behalf of the above.It should be noted that shares issued by an SPFcannot be offered to the public or be listed.5. SupervisionThe SPF is not regulated by the CSSF, but,rather, is subject to the supervision of theindirect tax administration (Administration del’Enregistrement et des Domaines). Oversight islimited to the certification each year by thedomciliation agent, independent auditor, orchartered accountant of the SPF that theinvestors of the SPF fall within the scope of theSPF law, as amended.6. TaxationAn SPF is exempt from Luxembourg corporateincome tax, municipal business tax, and netweath tax.An SPF is subject to an annual subscription tax(taxe d’abonnement) of 0.25% on the amount of(1) its paid-in capital, plus (2) its share premium,plus (3) the amount by which its debt exceedseight times the amount of (1) and (2), subject toa maximum of € 125,000 and a minimum of €100.Dividend distributions by an SPF to itsshareholders (and capital gains earned on thesale of shares in an SPF by non-residentinvestors) are exempt from withholding inLuxembourg. However, as paying agent, an SPFmust withhold 10% on interest payments madeto Luxembourg residents and 35% on interestpayments made to individuals resident inanother EU Member State.Because of its special tax status, an SPF cannottake advantage of double tax treaties.As an SPF is not engaged in commercialactivity, it is not subject to VAT.7. Applicability of AIFMAs private wealth management companies areintended to manage the private wealth ofindividuals, and to the extent that they do notraise external capital, they should not fall withinthe scope of the AIFM Law.F. ALTERNATIVE INVESTMENT FUNDMANAGERS LAWFor those alternative investment vehicles thatfall within the scope of the AIFM Law, they willneed to either engage an authorized alternativeinvestment fund manager (“AIFM”) asmanagement company or seek authorizationthemselves from the CSSF as AIFMs (i.e.,internally-managed AIFs). However, there aretwo important exemptions from the authorizationrequirement:1) The AIFM Law does not apply toAIFMs established in Luxembourg if theymanage AIFs whose only investor is theAIFM, the parent or a subsidiary of the AIFM,provided that none is itself an AIF.2) No authorization is required of thoseAIFMs (including self-managed AIFs) whoseassets under management, including throughthe use of leverage, do not exceed€100,000,000 or whose assets undermanagement, unleveraged and with noredemption rights exercisable for 5 yearsfrom the initial investment, do not exceed€500,000,000.However, such AIFMs set forth in 2) above willneed to register with the CSSF and provide itinformation regarding investment strategies andother information on a regular basis. It should benoted that a self-managed AIF can engage onlyin activities of internal management of the AIF(i.e., portfolio management, risk management,administration, marketing, and activities relatedto the assets of AIFs).For all other AIFMs that manage or market unitsor shares of a Luxembourg AIF or arethemselves a Luxembourg AIF, authorization bythe CSSF is required, if the AIFM is based inLuxembourg. If the AIFM is domiciled in anotherEU Member State it is authorized by theregulatory authority of the country of its domicile.The latter can manage Luxembourg AIFs on thebasis of a “European passport.”The authorization process of a LuxembourgbasedAIFM is beyond the scope of thisbrochure. DSM can provide further informationregarding the authorization of AIFMs uponrequest.11