What the labels are
EuVECA stands for European venture capital fund, EuSEF for European social entrepreneurship fund. Both are designations that a manager may use when marketing a qualifying fund in the EU, under Regulations (EU) No 345/2013 and No 346/2013; they are not legal forms, and a labelled fund is an alternative investment fund. A qualifying fund invests at least 70% of its capital contributions and uncalled commitments in qualifying investments; up to 30% may go into other assets (Article 3 of each Regulation).
The EuVECA is the widely used one: our count of ESMA's register on 10 November 2026 shows 995 active EuVECA entries against 25 active EuSEFs. The European Commission consulted on a reform of the rules for venture and growth capital funds in early 2026; no legislative proposal had been published by 10 November 2026.
EuVECA: qualifying investments
A EuVECA invests in young and small companies. A qualifying portfolio undertaking is, when the fund first invests, not admitted to trading on a regulated market or a multilateral trading facility and employs up to 499 persons — or is a small or medium-sized enterprise listed on an SME growth market. It is not itself a fund, a bank, an investment firm or an insurer, and it is established in the EU or in a third country that is not on the FATF list and has agreed to exchange tax information (Regulation (EU) No 345/2013, Article 3(d)).
Qualifying investments are equity and quasi-equity issued by such an undertaking, shares bought from its existing shareholders, units of other EuVECAs, and loans to an undertaking in which the fund already holds a qualifying investment — the loans limited to 30% of the fund's capital contributions and uncalled commitments (Article 3(e)).
EuSEF: social undertakings and impact
A EuSEF invests in social undertakings: unlisted companies whose primary objective, under their statutes, is to achieve measurable, positive social impacts — by providing goods or services that generate a social return, by a method of production that embodies their social objective, or by financing social undertakings — and which use their profits primarily for that objective and are managed in an accountable and transparent way (Regulation (EU) No 346/2013, Article 3(1)(d)). There is no limit on the number of employees.
The range of instruments is wider than for a EuVECA: equity, quasi-equity, debt instruments, loans without the 30% limit and any other type of participation (Article 3(1)(e)). In return, the manager must measure the impact: it sets up procedures and indicators, tells investors before they invest which social impact is targeted and how it is measured, and reports the outcomes in the annual report (Articles 10, 13 and 14).
The manager: two routes
The labels were made for managers below the AIFMD threshold: a manager whose funds are unleveraged, closed for at least five years and together not above EUR 500 million registers with its home authority and then manages and markets EuVECAs or EuSEFs under the Regulation itself (Article 2(1)). Of the AIFMD, only the registration and reporting duties apply to it. A manager that later exceeds the threshold other than temporarily applies for authorisation as AIFM within 30 calendar days and continues to use the label.
Since 2018 an authorised AIFM may use the labels as well. It remains subject to the AIFMD — including the depositary — and registers each labelled fund with the fund's authority; of the Regulation, mainly the rules on eligible investments and investors apply to it (Article 2(2)). In Luxembourg that is the route for a RAIF, which must have an authorised AIFM.
Own funds, conduct and reporting
A registered manager has an initial capital of EUR 50,000 and own funds of at least one eighth of its fixed overheads of the preceding year; where the funds it manages exceed EUR 250 million, it adds 0.02% of the excess (Regulation (EU) No 345/2013, Article 10; Regulation (EU) No 346/2013, Article 11). It treats investors fairly, discloses any preferential treatment in the fund rules, identifies and manages conflicts of interest and may delegate functions only as long as it does not become a letter-box entity (Articles 7 to 9).
The fund may not be leveraged: no borrowing, derivatives or other method may increase its exposure beyond its committed capital, and it may borrow or give guarantees only where they are covered by uncalled commitments (Article 5). The assets are valued at least once a year under rules set in the fund documents, and an audited annual report is sent to the authority within six months of the year-end; the audit confirms that money and assets are held in the name of the fund (Articles 11 and 12).
Investors
A EuVECA or EuSEF may be marketed to professional clients within MiFID II and to other investors who commit to investing a minimum of EUR 100,000 and state in writing, in a document separate from the commitment, that they are aware of the risks. The manager's own executives, directors and employees who are involved in managing the fund may invest without these conditions (Article 6 of each Regulation).
The vehicle adds its own rule. A SICAR, SIF or RAIF is reserved to well-informed investors under its product law, and a labelled fund in one of these forms must satisfy both tests; the Luxembourg test also admits investors assessed by a bank or another professional, which the Regulations do not. Where investors are not professional clients, a key information document under the PRIIPs Regulation is needed before the fund is offered to them.
The passport and marketing
The registration is valid for the whole EU. The home authority informs the authorities of the Member States where the manager intends to market, and ESMA; host authorities may not impose requirements or administrative procedures for the marketing, require prior approval or charge fees (Regulation (EU) No 345/2013, Articles 14 to 16). The passport covers the marketing of the registered funds — not other funds of the same manager, and not the management of funds established in other Member States.
Pre-marketing is allowed: a manager may test investors' interest in a fund not yet established or registered, informs its home authority by an informal letter within two weeks, and treats any subscription by professional investors within 18 months as marketing (Article 4a). A Luxembourg manager files marketing and pre-marketing notifications, new funds and new Member States with the CSSF through eDesk under Circular CSSF 22/810.
Registration with the CSSF
In Luxembourg the CSSF registers managers and funds under both Regulations (Law of 16 July 2019). The manager informs the CSSF of the persons who conduct its business, the funds and their investment strategies, its arrangements for complying with the Regulation and the Member States of marketing; the Regulation requires a decision no later than two months after all the information has been provided (Article 14). The file is submitted with the CSSF's forms for the registration of an AIFM; a sub-threshold manager registers within two months of starting to manage its first fund.
The CSSF's fees are EUR 4,800 for registration as a EuVECA manager and EUR 4,800 as a EuSEF manager; registration as a sub-threshold AIFM costs EUR 7,200 and is followed by an annual fee of EUR 10,000. There is no fee per labelled fund. A registered manager reports to the CSSF once a year; breaches of the Regulations can be fined up to EUR 1,000,000 for a natural person and up to EUR 5,000,000 or 10% of annual turnover for a legal person.
The Luxembourg vehicle
Most Luxembourg EuVECAs are unregulated partnerships: of the 38 funds and compartments on the CSSF's list at 31 October 2026, 24 are AIFs outside the product laws, nine are SICARs and five are RAIFs; both EuSEFs are SICARs. In a special limited partnership the manager is always external, and it can be the general partner itself (CSSF FAQ on the AIFM law, Q1.E). An unregulated fund with a registered manager needs no depositary under the AIFM law.
A SICAR is the regulated alternative: authorised by the CSSF, limited to risk capital, without a risk-spreading requirement, with a depositary and a minimum capital of EUR 1,000,000 within 24 months. A RAIF needs an authorised AIFM and a depositary. The CSSF's circular on net asset value errors applies to labelled funds, while its circular on investment limits does not apply to a labelled SIF or SICAR (Circulars CSSF 24/856 and 25/901). For anti-money laundering supervision, the registered manager answers to the CSSF and an unregulated fund to the registration duties, estates and VAT authority (AED).
Tax
The labels carry no tax regime of their own; the fund is taxed like its vehicle. A partnership that is an alternative investment fund is transparent and treated as non-commercial, provided a capital company acting as general partner holds less than 5% (LIR Article 14; Circular L.I.R. n° 14/4). A SICAR in corporate form is fully taxable, but its income and gains from securities are not taxable income; a SICAR in partnership form is transparent. A RAIF pays a subscription tax of 0.01% a year or, if it invests only in risk capital, is taxed like a SICAR. An unregulated partnership and a SICAR pay no subscription tax.
The management of the fund is exempt from VAT. Since 2026, carried interest from an alternative investment fund is taxed at a quarter of the ordinary rate where it is purely contractual and is not taxable where it is tied to a participation held for more than six months, unless that participation exceeds 10% (LIR Article 99bis). Where foreign investors hold half or more of a partnership and treat it as a company at home, the rule on reverse hybrids has to be checked.
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