Why Brazilian capital is turning to Luxembourg

According to ANBIMA, the Brazilian Financial and Capital Markets Association, Brazil’s asset management sector is among the world’s top 10 fund markets, with AUM reaching approximately EUR 1.6 trillion as of July 2025. The market comprises more than 32,000 funds, supported by over 1,000 asset managers and 100 fiduciary administrators, serving upwards of 40 million investment accounts.

Regulatory initiatives such as Resolution 175, issued by CVM, the Brazilian Securities and Exchange Commission, have modernized Brazil’s investment fund framework and significantly improved conditions for foreign investments. The resolution introduced greater flexibility for funds to allocate assets abroad — allowing up to 100% exposure for qualified and professional investor funds. It also established clearer rules around asset eligibility, liquidity, and pricing for international holdings, aligning Brazilian standards more closely with global practices. Additionally, it formally recognized the use of foreign vehicles and partnerships, enabling Brazilian funds to participate in international master-feeder structures. Governance and transparency requirements were strengthened, especially regarding foreign custody, currency risk, and investor disclosures.

In 2025, key events in Luxembourg have underscored the strengthening ties between Brazil and Luxembourg’s financial markets. The ALFI Global Asset Management Conference provided a platform to showcase Brazil’s ongoing regulatory progress and internationalization efforts, including measures aimed at attracting foreign capital and developing new fund types such as ETFs.

Subsequently, ANBIMA’s “Luxembourg Meets São Paulo” summit further deepened collaboration, bringing together regulators, institutional investors, and Luxembourg financial authorities. The Brazilian market has drawn inspiration from Luxembourg’s fund structuring expertise, particularly as Brazil advances its regulatory framework for private equity products and retail investor access.

Luxembourg continues to lead globally in cross-border fund structuring — and its appeal to Brazilian fund managers is growing rapidly. The country offers a unique combination of technical, operational, and cultural advantages that make it an ideal hub for international expansion.

On the regulatory and structuring side, Luxembourg provides:

• Flexible fund vehicles, including SIFs, RAIFs, SCSp, and SICAVs
• A strong legal and regulatory framework under the supervision of the CSSF
• An extensive network of tax treaties, supporting efficient global capital flows
• A mature ecosystem of specialized service providers covering fund administration, audit, legal, and depositary services

Importantly, Luxembourg also offers notable tax efficiencies for international investors. One of the advantages of using Luxembourg is that no capital gains tax arises upon redemption of shares or units in a Luxembourg investment fund. In addition, no withholding tax is levied on dividend distributions from a Luxembourg investment fund to a foreign investor. These features contribute to the jurisdiction’s reputation for providing tax-neutral vehicles that facilitate efficient cross-border capital deployment.

Equally important for Brazilian stakeholders is Luxembourg’s strong Portuguese-speaking professional community. With a significant number of auditors, lawyers, and fund administrators fluent in Portuguese, Brazilian fund managers benefit from:

• Simplified legal structuring and onboarding
• Streamlined communication with service providers and investors
• Greater ease in governance, reporting, and compliance

This cultural and linguistic affinity makes Luxembourg not only operationally efficient, but also strategically aligned with Brazil’s expanding international fund ambitions.

As Brazil’s fund industry evolves through bold regulatory reform and increasing global engagement, Luxembourg emerges as a natural and strategic partner. Initiatives such as CVM Resolution 175 have positioned Brazil closer to international standards, while high-level cooperation between ANBIMA, ALFI, and Luxembourg’s financial authorities demonstrates a shared commitment to facilitating cross-border investment.

For Brazilian fund managers, Luxembourg offers a proven platform to structure, scale, and distribute investment vehicles to global investors. Its legal flexibility, regulatory credibility, multilingual workforce, and strong network of service providers create a stable environment to operate internationally with confidence. Add to that Luxembourg’s tax treatment for foreign investors, and the jurisdiction becomes even more compelling for long-term international fund structuring.

At KPMG Luxembourg, we stand ready to support this transition. Our Private Equity team combines deep knowledge of global fund structuring and compliance, experience navigating both Brazilian and European regulatory frameworks, and Portuguese-speaking professionals who understand the specific needs of Brazilian asset managers.

Whether you’re exploring your first European feeder, establishing a co-investment platform, or enhancing governance for international capital raising, we can help you build a successful, scalable structure aligned with your long-term strategy.