Coredo

Since 2016, my team has been supporting international projects in Europe, Asia and the CIS: from registration of legal entities and obtaining financial licenses to building AML/sanctions compliance systems and providing full operational support. Over that time I have seen how acutely entrepreneurs and managers need clear and fast tools to enter the EU market. In the investment segment, such a tool has become the Luxembourg RAIF: Reserved Alternative Investment Fund. In this article I will lay out why establishing a RAIF in Luxembourg today is one of the most rational ways to launch an alternative fund, how RAIF registration in Luxembourg works in practice, and which solutions COREDO usually builds into the architecture of fund structures to accelerate time-to-market and reduce regulatory and tax risks.

Why choose a RAIF in Luxembourg for funds?

The 2016 law on RAIF in Luxembourg offered a simple yet elegant compromise: the fund does not undergo prior authorization by the regulator, but operates under the supervision of an authorized AIFM and within the AIFMD ecosystem. This model sharply reduces time-to-market when launching a RAIF and makes rapid fund registration in Luxembourg an achievable goal without sacrificing the quality of risk management. In practice we observed first subscriptions already 10–12 weeks after the project start.

RAIF registration: the fastest way to enter the European field of alternative investments if the team is ready to operate under AIFMD rules and maintain a strong compliance framework for AML/KYC, risks and reporting. The regulatory advantages of RAIF include access to AIFMD passporting (through an AIFM), flexibility of investment strategies and the absence of limits typical for retail products.

How to quickly open a RAIF in Luxembourg

Legal support for RAIF registration relies on a clear checklist. I advise starting with the target strategy, investor profile and distribution geography, and then moving on to the vehicle, providers and documents. The COREDO team in a typical project runs all tracks in parallel to shorten calendar timeframes and eliminate bottlenecks before they arise.

Key registration stages and the RAIF checklist under the supervisory Commission CSSF are as follows:

• Preliminary architecture: strategy, mandate, investor profile (qualified/professional), liquidity, leverage, valuation policy.
• Choosing the fund’s legal form: FCP (contractual) or corporate (SICAV in the form of SA/SCA/SARL, as well as SCSp/SCS as flexible structures). For private equity and real assets SCSp most often prevails.
• AIFM authorization and duties: choosing an authorized AIFM in the EU (often Luxembourg-based), agreeing delegation of investment management and risk management, RMP, conflicts of interest policy, AIFMD reporting.
• Depositary and administrator for the RAIF: appointment of a depositary (bank/investment firm in the EU), selection of administrator and NAV calculation agent, transfer agent, registrar, auditor.
• Documents for RAIF registration: investment memorandum/subscription memorandum (PPM), LPA for SCSp, constitutional documents, AML/KYC and sanctions policy, valuation policy, risk management, SLA and service agreements.
• Notarization and Legal review of the constitutional documents, registration in the Luxembourg Trade and Companies Register (RCSL), account opening, subscription organization.
• Setting up distribution: AIFMD passporting and marketing in the EU, distribution channels, placement agent and agency agreements, Reverse Solicitation policy and legal risks.

registration documents RAIF

The PPM is the living DNA of the fund, not a formality. At COREDO we ensure that the investment memorandum and the Limited Partnership Agreement reflect the economics of the deal (management fee, performance fee, carried interest, clawback), liquidity (gates, suspension), the fund’s strategy and risk policy. The subscription memorandum and the LPA for the RAIF form a single framework together with valuation policies and risk management.

Anti-money laundering policy for funds, AML procedures / KYC for institutional investors, sanctions compliance and GDPR: mandatory elements. We build checklists to verify the integrity of RAIF investors, UBO disclosure and data storage in accordance with GDPR. This improves the quality of AML and KYC for RAIF and accelerates onboarding.

Administrator, NAV calculation and depositary

For cross-border placement of RAIF units, payment and transfer agents are often engaged, as well as clearing and settlement system operators when listing certain share classes on LuxSE with settlements through Euroclear/Clearstream. Where listing is not required, settlements are made through custodial banks and administrators with strict AML/KYC and sanctions controls.

RAIF Structure: forms, SPV, substance

SPV structures for RAIF support investments in specific assets and jurisdictions. SOPARFI “holdings” often become intermediate companies for private equity and real estate thanks to the network of double tax treaty agreements and the efficiency of dividend/sale flows. For infrastructure we add project SPVs and contractual covenants with lenders.

Substance in Luxembourg for a RAIF fund: not a checkbox, but a managerial reality. I put in place local directors with the necessary experience, a place to hold documents, local meetings, agreements with key providers, and the economic rationale for expenses. Requirements for economic substance and presence are intensifying against the backdrop of BEPS risks and the practices of EU tax authorities. Additionally we take into account the UBO register and beneficiary disclosure obligations.

Taxation of RAIF and Investors

Income distribution policy, carried interest and tax consequences depend on the jurisdictions of the LP and GP. COREDO configures carried vehicles, waterfall and clawback to minimise ‘surprises’ on exits and ensure transparency for the auditor and investors.

Passporting of RAIF and AIFM under AIFMD

AIFMD and RAIF passporting: a powerful mechanism for the cross-border distribution of RAIF units within the EU. The AIFM sends notifications to the regulators of the host countries, after which marketing to professional investors becomes possible. International distribution of RAIF units in the EU is combined with local rules, so COREDO prepares marketing blue books and checklists for each market.

AIFM authorization and duties include risk management, leverage limits, Annex IV reporting, supervision of the delegation of investment management and control of the valuation function. Delegation of RAIF management and oversight require clear contracts, KPIs and regular monitoring. AIFM conflict of interest management and internal compliance are enshrined in a policy available to investors on request.

Risks, compliance (AML/KYC, sanctions, ESG)

Sanctions compliance and sanctions screenings, AML/KYC procedures for investors and ESG compliance are essential pillars of trust. Integration of ESG criteria and reporting strengthens the commercial appeal of a RAIF to investors, especially in the Netherlands, Scandinavia and Germany. AIFMD supervision and internal compliance are complemented by GDPR and the protection of investors’ personal data.

RAIF for funds and real estate

RAIF for real estate relies on SPVs with limited recourse and bank financing. Liquidity of units, redemption gates and suspension are governed by the mandate; for closed-ended funds, planned distributions and investor exit strategies.

RAIF for a family office is often used as an “umbrella” with several sub-funds for different asset classes. Family office use cases of RAIF allow consolidation of administration, improved risk control and documentation of investment mandates for succession. Restrictions on retail distribution and compliance remain: RAIF is addressed to qualified/professional investors.

Fund economics: fees and expenses

Liquidity management, covenants and covenant breaches: an area of heightened attention for credit and infrastructure RAIFs. The AIFM and the administrator should monitor payment schedules, compliance with leverage limits and timely escalate deviations to the investment committee.

COREDO Cases and Time-to-Market

RAIF Life Cycle

Liquidity of units, redemption gates and suspensions are determined in advance in the PPM and LPA. Investor exit strategies and winding-up procedures include appointing a liquidator, communicating with the depositary and administrator, calculating final distributions and closing entries in the RCSL. Liquidation and exit from the RAIF proceed smoothly if all operational documentation has been kept up to date and SLAs with providers have been observed.

On the secondary market for RAIF interests, transfers of LP interest are possible under the LPA procedures with GP consent and in compliance with AML/KYC. Regulation of private markets and the secondary market for interests impose disclosure requirements and sanctions checks – COREDO runs these processes as separate mini-projects.

RAIF launch checklist and common mistakes

When RAIF is not suitable, pros and cons

How COREDO supports the launch of a RAIF

COREDO handles the structural architecture, legal drafting and coordination of providers. We prepare the PPM, LPA, side letters, AML/KYC and sanctions policies, valuation policy, risk framework and governance documents. We also select the AIFM, depositary, administrator and auditor, agree SLAs, and arrange notarisation and registration with the RCSL.

Conclusions

RAIF is a mature and flexible platform for launching alternative funds in the EU with a unique balance of speed and regulatory quality. When the strategy, documents and providers are aligned, RAIF time-to-market is measured in weeks, not quarters. At the same time the rules of the game are clear: AIFM supervision, robust AML/KYC and sanctions framework, well-considered valuation and risks, and transparent economics for investors.

I have been building COREDO since 2016 with a single goal: to help entrepreneurs and CFOs quickly and safely scale their businesses through international structures, licensing and high-quality compliance. In recent years the European market has given us a new tool that genuinely expands financing for long-term projects and opens private investors’ access to illiquid asset classes. This is about ELTIF 2.0: the updated European form of long-term investment funds with a distribution passport. Below: my perspective as the founder and a practitioner of the COREDO team, so that you can make an informed decision: to launch your own ELTIF, invest in one, or use it as part of your corporate strategy.

Why does business need ELTIF 2.0 today?

ELTIF 2.0: EU rules and opportunities

ELTIF for investors: access and protection

Minimum investments and fees

How to avoid liquidity mismatch

Eligible assets and valuation models

Valuation of illiquid assets and NAV

How to manage risks and hedge?

How to launch ELTIF 2.0

Choice of jurisdiction

Fund: SPV/holding company, capital calls

Depositary and asset custody

Distribution and retail in the EU, Asia and the CIS

Distribution and client tests

Taxation and investor reporting

Liquidity of units on the secondary market

COREDO cases: from idea to first closing

Renewable energy infrastructure and long-term capital

Transitioning the fund to the retail segment

Cross-border distribution and AML for investors from Asia and the CIS

Entrepreneurs’ questions

How COREDO scales the product

Conclusions

I often hear the same request from owners and asset managers: provide a structure that accelerates a fund’s launch, withstands institutional due diligence, and scales without pain. The Variable Capital Company in Singapore (Singapore VCC) addresses exactly these needs. In recent years the COREDO team has completed dozens of VCC design and registration projects for hedge funds, credit strategies, venture and multi-asset platforms, and I see how quickly the VCC is becoming the standard in Asia and a practical alternative to European and UK formats.

The VCC was created as the market’s response to flexibility, technological sophistication, and regulatory predictability. Its structure supports an umbrella VCC with sub-funds, strict asset segregation and unified corporate processes.

VCC architecture and asset segregation

The basic model – an umbrella VCC structure under which one or several sub-funds are created. Each sub-fund has separate assets and liabilities, and the legislation provides for statutory segregation, i.e., legal separation at the level of law rather than only by contract. This is critical for hedge funds with different risk strategies, where the investor mandate and liquidity vary across sub-funds.

Our experience at COREDO has shown that multi-strategy managers find it beneficial to consolidate common functions (directors, administrator, auditor, compliance) at the “umbrella” level and allocate portfolio decisions to the sub-funds. This reduces duplication of costs, simplifies reporting, and transfers of assets between VCC sub-funds during rebalancing proceed through transparent procedures at the level of the board of directors and the administrator.

An additional advantage: the registration of sub-funds and their asset segregation do not require the creation of separate legal entities. This speeds up the launch of new strategy lines, simplifies the closing or reorganization of VCC sub-funds and disciplines corporate governance.

VCC Act 2018 and 2026 Amendments: the Role of MAS

The legal foundation is laid by the VCC Act 2018, and the 2026 amendments strengthen AML/CFT controls, the disclosure of beneficial ownership, and the quality of reporting. The Monetary Authority of Singapore (MAS) coordinates supervision through the requirements of the SFA (Securities and Futures Act) and the rules for Collective Investment Schemes (CIS), and also introduces clarifications to the MAS 2026 reporting requirements, including electronic channels and standardized templates.

In 2026 the emphasis shifted to operational risk management and cybersecurity, so that fund platforms comply with new outsourcing methods and cloud storage.

From a classification standpoint, a VCC can support both closed and open strategies within a CIS, providing flexibility in liquidity and instruments. The COREDO team is accustomed to drafting documents so that a sub‑fund’s investment mandate clearly falls into the appropriate category and internal procedures comply with the SFA.

How to set up a VCC for a hedge fund

I start with a product roadmap: strategy, liquidity, investor geography, institutional requirements. Then we structure the legal shell: VCC registration in Singapore, define the board composition, and choose the corporate secretary and CSP.

Next – Licensing of the fund manager (FMC/CMS). To manage assets registration as a Fund Management Company (FMC) is required: depending on AUM and client type the Registered Fund Management Company (RFMC) scheme or Capital Markets Services (CMS) licence will be suitable.

In parallel we arrange agreements: custodian and depositary functions, fund administrator and transfer agent, independent auditor, provider of independent valuation (for illiquid assets). At the level of investment documentation we set up management fee and performance fee with high-water mark and hurdle rate, waterfall distribution of income and side pockets for illiquid positions. The COREDO team pays attention to both legal logic and operational feasibility so that the administrator correctly calculates NAV and carried interest.

VCC Taxation in Singapore

VCC taxation in Singapore relies on preferential regimes (including the Enhanced Tier Fund), exemptions for investment income when criteria are met and tax residency is confirmed. Economic substance rules and demonstration of activity are important: board meetings in Singapore, qualifying resident directors, local compliance and on-the-ground operational functions.

There is a network of double taxation avoidance agreements with investors from the EU and Asia. We model cash flows and withholding taxes by beneficiary country, and also review transfer pricing and related parties in the VCC structure if the manager’s service company is present. For GST (Goods and Services Tax) special rules apply to funds; properly structured exported services and interactions with non-residents affect the calculation.

COREDO’s practice confirms: clear documentation of the “centre of management and control” and a well-thought currency structure and profit allocation of the VCC help reduce tax risks associated with the VCC and ensure a steady ROI for investors.

AML/CFT, KYC and e-KYC Compliance 2026

AML compliance for VCC is based on a risk-based approach: PEP checks, sanctions screening, sources of funds and the obligation to file SARs for suspicious transactions.

I ensure that the policy reflects actual operations: investor risk profiles are aligned with the sub-fund strategy, and triggers for Enhanced Due Diligence are logical and measurable.

KYC and e-KYC for VCC have become standard. We build a digital investor onboarding workflow: document collection, e-signature, liveness-check, address verification, automatic sanctions screening and UBO mapping. The beneficial ownership register must be up to date and reconciled with the administrator’s and transfer agent’s data. For US clients: FATCA reporting and GIIN settings; for others: Common Reporting Standard (CRS).

Finally, the impact of PDPA (Personal Data Protection Act) and GDPR when working with European investors requires conscious data management: minimization, storage, access and deletion. We document the roles of controller and processor, and define secure channels for exchanges with administrators and distributors.

Operating model: NAV, IFRS, audit

The custodian and depository are anchor partners. In Singaporean practice the custodian provides safekeeping and the processing of corporate actions, and a trustee is appointed for some CIS-structures. We compare servicing by asset classes, cut-offs for settlements, fee models and prime brokerage capabilities. The administrator and transfer agent close the NAV, maintain investor records, calculate fees and produce reporting; the SLA should fix deadlines, responsibilities and the business continuity plan.

NAV valuation practices for complex assets are set by the valuation policy: fair value hierarchy, independent quotes, model prices, role of an independent valuation provider.

Financial reporting under IFRS and external audit requirements are the basis of trust. Auditor independence, the agreed scope of sample testing across sub-funds and the timeline for completion of audits are critical to the marketing cycle.

Liquidity, risks and leverage

Liquidity management and redemption gates in VCC begin with designing terms: redemption periods, notice periods, lock-up periods, suspension of redemptions and side pocket structures. For illiquid assets, side pockets and special purpose vehicles within a VCC help protect investors of the underlying sub-fund. We tie the policy to the actual turnover of assets, stress testing and liquidity ranking.

The use of borrowed leverage and limits for a VCC are linked to prime brokerage agreements and margin financing. The COREDO team sets up collateral agreements, governance for margin calls and limits on leverage. For derivative operations we deploy frameworks for margin requirements, counterparty risk assessment, as well as policies on securities lending and credit risk.

At the core – the risk management framework: VAR, stress testing, scenario analysis, limits by asset classes and concentrations, three lines of defense and regular reports to the board of directors. This approach simplifies discussions with institutional investors and reduces operational risk for both the manager and the investor.

Engaging with Investors in the EU

AIFMD marketing rules require careful thinking. For many strategies, fund marketing in Europe is through a VCC: country-specific NPPR requirements and/or working via Reverse Solicitation. Passporting from Singapore to the EU does not apply, so we develop country-by-country maps: where reverse solicitation is permitted, where a local representative is required and what disclosures are necessary.

Servicing EU investors and GDPR requirements come to the forefront. We formalize subscription channels, KID/KIID materials where necessary, and agree disclosures on remuneration, ESG and risks. Market access strategies to attract institutional investors from the EU, Asia and the CIS include a roadshow schedule, selecting a custodian with a recognised name and audit practices accepted by institutions.

Our document packages help complete KYC quickly, without sacrificing the thoroughness of the checks.

Tokenization without regulatory gaps

Tokenization of fund shares in a VCC and tokenisation of fund shares require careful legal scrutiny. Singapore allows digital solutions subject to compliance with the SFA and rules on digital tokens; smart contracts and automation of distributions (distributions) are possible if the administrator, custodian and audit agree on control points. I insist on an independent reconciliation of the token register with the investor register at the transfer agent.

Crypto hedge funds in a VCC, legal risks around custody, AML and volatility. We set up custodial chains with certified crypto custodians, include additional KYC requirements and valuation methodologies for illiquid/digital positions.

Cybersecurity, a mandatory element: cybersecurity controls, vulnerability log, DLP, access control and cloud storage policy. Such measures are important not only for MAS, but also for due diligence by exchanges and prime brokers.

Cost calculation, ROI and scaling

The cost of launching and maintaining a VCC depends on the number of sub-funds, the manager’s license, the composition of partners and the geography of investors. In a typical configuration CAPEX includes registration, legal documentation, setup of service providers and the IT stack; OPEX includes administration, audit, compliance, custodian fees, directors and D&O insurance. I recommend performing a cost-benefit analysis: OPEX vs CAPEX when choosing a VCC, expected AUM, fee terms and the load on the back-office.

KPIs and ROI metrics for a fund structure: IRR on the manager’s capital, MOIC on platform investments, TER for each sub-fund, investor onboarding speed and NAV close time. Scaling a hedge fund via a VCC relies on modularity: new sub-funds are opened according to a ready checklist with vetted counterparties.

How to organize a hedge fund waterfall in a VCC? We fix the management fee, performance fee, high-water mark and hurdle rate, and set out the clawback mechanics and crystallization dates. For currency structuring and profit calculation the VCC uses the fund’s base currency, an FX hedging policy and a transparent profit calculation per share class. If necessary we include re-domiciliation and cross-border migration of funds to transfer assets into the VCC without tax or operational shocks.

Reorganization and liquidation of VCC sub-funds, as well as liquidation, winding-up procedures and creditor priorities, are described in advance in the constitutional documents and the liquidity management policy. This reduces the risk of disputes and simplifies coordination with investors.

VCC, SICAV and English structures

Jurisdictional comparisons show: VCC wins on speed of launch, sub-fund flexibility and tech-enabled compliance. The Luxembourg SICAV is familiar to European institutional investors and provides a strong “passport” in the EU, but requires more time and budget.

At COREDO I prefer to match the structure to the strategy and the investor. For pan-Asia capital raising and tech funds, VCC often leads; for deep distribution into the EU, SICAV remains a strong option. There is no “one-size-fits-all” here — it’s important to design the architecture, budget and licensing roadmap.

Relocating a management company to Singapore: pros and cons

Relocating a management company to Singapore strengthens the economic presence (substance) of a VCC: resident directors, a local risk-management and compliance team, board meetings, working relationships with MAS. Pros: tax predictability, access to Asian investors, a well-developed infrastructure of custodians and administrators.

Downsides, requirements for staffing and operational discipline: you will need to invest in processes, PDPA procedures, cyber security and regular reporting. If the strategy targets Europe, parallel services in the EU under GDPR and AIFMD distribution will remain relevant. I am considering hybrid models: a manager in Singapore plus a distribution office in key cities in Europe or Asia.

COREDO case studies: how it works in practice

Case 1. Multi-strategy VCC with two sub-funds for public and private assets. We designed the umbrella, organized an RFMC with a scalable roadmap on the CMS, engaged a global custodian and administrator, and set up an independent valuation provider for private positions. Within 12 months AUM surpassed the target, and the transition to the CMS was completed without interrupting marketing. Investors from the EU entered via reverse solicitation under agreed legal opinions.

Case 2. Crypto hedge fund inside a VCC with a pilot for tokenization of shares. We engaged a specialized crypto custodian, strengthened the AML policy with on-chain monitoring, and implemented e-KYC with liveness checks and sanctions screening of addresses. NAV was calculated using an independent valuation model and pricing sources agreed with the auditor. The COREDO team built smart contract checkpoints for distributions and reconciliation with the transfer agent.

Case 3. A family office with an Enhanced Tier Fund and four sub-funds by asset class. We optimized the tax profile, set KPIs for TER and operational SLAs, and appointed independent directors and an audit committee. Within the structure there was a side pocket for illiquid assets and an SPV for securitization transactions. Institutional due diligence was completed without issues, and IFRS reporting was closed in line with the marketing cycle.

ESG maturity for institutional investors

VCC corporate governance and independent directors are not a formality. I implement board charters, committees (audit, risk), a meeting schedule and a policy on conflicts of interest and related party transactions. This minimizes risks and increases the parties’ confidence.

ESG and sustainable investing in the context of VCC manifest in disclosures, due diligence of providers, voting policy and data management. Investors expect consistency: asset selection criteria, metrics, escalation procedures and independent verification where possible.

Founder’s pre-launch checklist

• due diligence of the fund manager and track record, including operational incidents.
• custodian vs trustee role in Singapore practice and compatibility with prime brokerage.
• fund administrator responsibilities and SLAs, experience with the required asset class.
• transfer agency and investor register maintenance, integration with e-KYC.
• independent valuation provider and valuation methodologies for illiquid assets.
• risk management framework: VAR, stress testing, scenario analysis and limits.
• valuation policy, fair value hierarchy and involvement of third parties.
• external audit requirements and auditor independence.
• beneficial ownership register and disclosure requirements.
• FATCA reporting for US investors and the Common Reporting Standard (CRS).
• AIFMD rules, reverse solicitation and local NPPRs in the EU.
• cybersecurity controls and cloud storage for fund administration.
• legal opinions for distributions and reliance letters for key jurisdictions.

Cost and timelines: a realistic benchmark

For a standard VCC with one sub-fund and RFMC, it’s reasonable to plan 3–5 months from the kick-off session to the first close, assuming prompt decisions and ready investment content. Budgets depend on the choice of providers and architecture, but the main share is made up by administration, audit, custodian and independent directors. I always provide two to three scenario budgets to align OPEX with target AUM and the required TER.

This is where the VCC shows its real advantage: rapid launch of new strategies with controlled margins and manageable risks.

VCC and the role of COREDO

VCC is not just a legal form. It is an infrastructure platform for strategy, marketing and compliance that helps accelerate growth, keep risk manageable, and speak to institutional investors in the same language. In light of the 2026 amendments to the VCC Act and tightening AML/CTF standards, funds with strong substance, clear policies and disciplined reporting will gain a strategic advantage.

I build roadmaps tailored to the needs of owners and managers: from a blank slate to first close and scaling.

If you are considering a Singapore VCC as a base for a hedge strategy or multi-asset platform, I invite you to discuss architecture, ROI and the roadmap: pragmatically, step by step, and with accountability for the outcome.