CNC clarifies consolidation rules for Luxembourg alternative investment groups

At a glance

The CNC Q&A 25/036 clarifies when subsidiaries held exclusively for resale fall outside the scope of consolidation and when entities may be exempt from preparing consolidated financial statements. It also confirms the withdrawal of the CNC Avis 09/002. Any exemption is subject to four conditions that should be thoroughly documented.

A closer look

On December 2, 2025, the CNC released Q&A 25/036, which clarifies the interpretation of Article 1711-8, paragraph 3, point 3 of the Law of 10 August 1915 (LSC) for companies operating in alternative investment. The Q&A also records the withdrawal of CNC Avis 09/002.

The Q&A applies to any financial year for which the legal filing deadline for annual accounts with the Trade and Companies Register (RCS) has not yet expired.

Objective: The Q&A provides guidance on: excluding subsidiaries held exclusively for resale from the scope of consolidation and, permitting exemption from preparing consolidated financial statements under Article 1711-9, point (2) LSC, when the exclusion applies to all subsidiaries.

Who is concerned

• Luxembourg parent companies that raise funds from well-informed investors to provide investment management services and deploy those funds for returns derived from capital appreciation upon disposal, and investment income.
• Investment vehicles in private equity, venture capital, real estate, infrastructure, private debt, and other alternative investment strategies.
• Companies holding strategic participations without a defined exit horizon or aiming to conduct commercial/industrial activities are excluded. Parent companies may still hold subsidiaries providing services related to investment activities.

Four key conditions to apply the exclusion (and benefit from the exemption if all subsidiaries are excluded):

• Exit strategy defined from inception.
• Consistent application to all subsidiaries held for resale.
• Fair value disclosure required for excluded subsidiaries.
• Information on significant events, guarantees, and uncertainties must be provided.

Cascade structures : A Luxembourg company controlled exclusively by an alternative investment company may also invoke Articles 1711-8(3)(3) and 1711-9(2) if:

• The above conditions are met at the parent company.
• No shareholder or partner holding at least 10% (SA/SCA) or 20% (SARL/other forms) has requested consolidated accounts no later than six months before the financial year-end.
• The company does not use subgroup exemptions based on its inclusion or presentation at fair value in the parent’s annual accounts.

We can support you in conducting the analysis and in preparing documentation that presents your findings in a clear, well-structured, and evidence-based manner.