Private asset funds

Luxembourg and Ireland are widely recognized for their expertise in establishing and servicing a diverse array of funds, including increasingly popular fund structures that support private assets. In particular, Luxembourg’s dominance as a cross-border fund domicile for private asset funds stems from its strong regulatory environment and tax ecosystem that are conducive to international fund distribution.

From 2010 to 2022, Luxembourg secured its place as the main domicile for alternative funds in Europe by boosting its share of European alternative assets from 15.6% to 61.8%.²

ELTIFs

Though there are other fund structures in both Luxembourg and Ireland that may prove attractive to asset managers, there is a particularly important opportunity in European Long-Term Investments Funds (ELTIFs), regulated, collective investment vehicles that facilitate the ability for investors, including retail investors, to put capital into long-term investment opportunities for unlisted assets such as private equity and debt, along with infrastructure projects.

Regulatory changes can, in part, explain the exponential growth since their emergence in 2015. To counter adoption hurdles and facilitate the flow of capital into ELTIFs, the ELTIF 2.0 Regulation, effective January 2024, ushered in simplified marketing rules to remove access barriers for retail investors and provide investment managers with enhanced flexibility regarding investment rules.³

As part of the EU’s initiative to channel retail capital into long-term social and infrastructure projects, ELTIF 2.0 also expanded the definition of real assets to include immovable properties like highways and infrastructure projects such as hospitals.⁴

Luxembourg is leading the charge as a domicile for ELTIFs and other private asset funds because of its early adoption of certain rule sets; high regulatory expertise on complex structures from legal, tax, and financial professions⁵; and elevated regulatory protection levels. Luxembourg’s political and economic stability also makes it a desirable domicile for fund managers seeking consistency, reliability, and resilience.⁶

Though nearly two-thirds of the ELTIFs established so far are based in Luxembourg,⁷ Ireland is looking to increase its prominence as an ELTIF domicile: in 2024, for example, the Central Bank of Ireland (CBI) introduced a dedicated ELTIF Chapter in its AIF Rulebook to facilitate the domestic implementation of ELTIF regulations and provide a pathway for ELTIFs seeking authorization in Ireland.⁸

Additional private asset funds in Luxembourg

·         UCI Part II Fund

·         Specialised Investment Fund (SIF)

·         Reserved Alternative Investment Fund (RAIF)

·         Société d’investissement en capital à risqué (SICAR Fund)

·         Société en commandite par action (SCA)

·         Société en commandite simple (SCS)

·         Société en commandite spéciale (SCSp)

Additional private asset funds in Ireland

·         Investment Limited Partnership (ILP)

·         Irish Collective Asset Management Vehicle (ICAV)

As asset managers explore the various private asset fund structure options available between Luxembourg and Ireland, it is up to them to evaluate which fund structures in either of the two domiciles might best fit their needs.

ETF contenders

Amid the enthusiasm in Europe for ETFs, particularly active ETFs, Ireland and Luxembourg are the two main players when it comes to domiciling cross-border funds. Europe’s leading ETF domicile is Ireland, where more than three-quarters (78%) of European ETFs are domiciled.⁹ Luxembourg, where 16% of European ETFs are domiciled, is Europe’s distant No. 2.¹⁰

Ireland is dominant as an ETF domicile for a number of reasons, including the fact that it has comprehensive double taxation treaties with 75 countries in effect and double taxation agreements signed with three additional countries.¹¹ Notably, Irish ETFs with U.S. equity exposure may benefit from a reduced 15% withholding tax on U.S. dividend income. Large passive managers with high exposure to U.S. assets have established low-cost passive tracker funds in Ireland over any other European domicile. In addition, Ireland does not levy a subscription tax on ETFs.

Although investment funds in Ireland are exempt from corporate tax, their suppliers – such as auditors, consultants, and lawyers – pay 12.5% on average in corporate tax compared to 25% in Luxembourg. Also in Ireland’s favor are attractive structures that facilitate market entry into active ETFs. A recent CBI clarification enables the creation of listed ETF share-classes within mutual funds without the UCITS ETF moniker at the sub-fund level.¹² Another recent advent at the beginning of 2025 is the CBI’s authorization of ETFs offering 100% exposure to collateralized loan obligations (CLO), something that was already possible in Luxembourg.¹³

Though Ireland has been dominating the ETF sector, Luxembourg is attempting to lap at its heels. Luxembourg benefits from comprehensive double taxation treaties with 92 countries.¹⁴ Despite Ireland’s strong ETF market, Luxembourg can effectively counter these advantages through mimicking U.S. ETFs in a process called “synthetic replication.”¹⁵ In addition, though passive ETFs had been exempt from paying subscription tax in Luxembourg, legislation from Luxembourg’s parliament effective January 2025 discontinued the levying of a subscription tax on active ETFs in Luxembourg as well.¹⁶

The Commission de Surveillance du Secteur Financier (CSSF), the Luxembourg financial services regulator, is also collaborating with the financial sector to promote ETF adoption, including a new fast-track approval process.¹⁷ Luxembourg also has its own equivalent of ETFs as a share class: its UCITS vehicles, especially Sociétés d’investissement à Capital Variable (SICAVs), now offer ETF share classes within existing mutual fund structures.

There is another recent ETF change afoot, with Ireland and Luxembourg enhancing their capabilities as ETF domiciles: in December 2024, the CSSF relaxed portfolio transparency requirements for active ETFs by permitting managers to publish holdings with a one-month lag.¹⁸ Irish regulators responded in kind: in April 2025, the CBI provided the ability to establish semi-transparent ETFs by amending its requirements for portfolio transparency and allowing ETFs to disclose portfolio holdings only at each calendar quarter.¹⁹

As with asset managers examining which private asset funds to launch in either Luxembourg or Ireland, those considering an ETF product may benefit from seeking a trusted partner in the process.

Fund services for wherever you domicile

Whether launching a private asset fund or an ETF in Luxembourg or Ireland, an asset manager has a particular set of needs for servicing and supporting these funds according to the intricate regulatory environment of either of these two prominent cross-border fund ecosystems.

To take advantage of these cross-border fund centres, of course, those very asset managers need assistance with fund services and wrapper creation. We at J.P. Morgan utilize our expertise and technology to service these innovative fund structures, meeting the needs of both institutional and retail investors.