Frequently asked questions

A non-EU fund manager can access European investors through several routes:

• National Private Placement Regimes (NPPRs) in specific EU countries.
• Establishing or partnering with an EU-regulated AIFM.
• Creating a Luxembourg or Irish fund structure (e.g., SCSp, RAIF).
• Using an AIFMD-compliant marketing and MIFID-compliant distribution framework.
• Working with regulated placement agents or distribution partners.

The optimal solution depends on the target jurisdictions, investor type (institutional, professional, family office), fundraising budget, and long-term European strategy. AIFMD remains the core regulatory framework governing access to European professional investors.

The AIFMD passport allows an authorised EU Alternative Investment Fund Manager (AIFM) to market qualifying Alternative Investment Funds (AIFs) to professional investors across the EU/EEA through a harmonised notification process rather than obtaining separate marketing approvals in every country.

Key benefits include:

• Access to multiple EU markets through a single regulatory framework.
• Greater credibility with institutional investors.
• Reduced regulatory fragmentation.
• More efficient fundraising across Europe.

For managers targeting several European jurisdictions, the passport is often the most scalable solution.

It is important to distinguish between two separate regulatory layers:

AIFMD II governs the fund and manager level: who may manage and market AIFs, passporting, Article 42 NPPR notifications, disclosure obligations and regulatory reporting. AIFMD applies to EU AIFMs and also to non-EU AIFMs marketing AIFs in the Union.

MiFID II governs the distribution and investor-facing activity level: who may perform investment services such as placement, reception and transmission of orders, investment advice and solicitation of investors. MiFID II regulates the conduct of distributors and investor protection requirements, and is designed to harmonise investor protection across Europe.

MiFID II generally becomes relevant when someone is actively approaching, soliciting, advising, placing or distributing an AIF to EU investors. Marketing and distribution are not the same concept: a manager may satisfy AIFMD marketing requirements but still require a MiFID-authorised distributor or placement structure if investor solicitation activities constitute regulated investment services.

What is required:

If a manager wishes to raise capital from EU investors:

• AIFMD compliance must be addressed first: Passport (EU AIFM route) or Article 42 NPPR notification (non-EU AIFM route).
• MiFID II compliance must be addressed separately if investors are being actively approached: distribution may need to be conducted by a MiFID investment firm, tied agent, placement agent or other appropriately authorised entity. Suitability, appropriateness, client categorisation, product governance and investor protection obligations may apply.

Many managers mistakenly believe that obtaining an AIFMD marketing notification automatically authorises fundraising activities. It does not.

Under the European framework:

• AIFMD answers: "May this fund be marketed in this jurisdiction?"
• MiFID II answers: "Who is permitted to perform the distribution activity and under what conduct standards?"

The Cross-Border Distribution Framework (Directive (EU) 2019/1160 and Regulation (EU) 2019/1156) harmonises aspects of marketing communications and pre-marketing, but it does not remove MiFID II requirements for regulated distribution activity. Marketing communications remain subject to regulatory standards requiring fair, clear and not misleading communications.

For non-EU AIFMs, the position is even more sensitive:

• The harmonised EU pre-marketing regime is available only to EU AIFMs and EU UCITS management companies.
• Non-EU AIFMs relying on NPPRs do not benefit from that harmonised regime.
• Several national regulators may view targeted approaches to investors as marketing requiring prior Article 42 notification.

As a result, a non-EU manager approaching EU investors typically needs to analyse both whether AIFMD marketing approval is required, and whether the proposed fundraising activity constitutes a MiFID-regulated investment service.

Yes, but the approach depends on the target countries. A US private equity fund may:

• Market under available NPPR regimes where permitted.
• Establish an EU feeder, parallel fund, or Luxembourg structure.
• Appoint or partner with an EU AIFM to facilitate broader European distribution.
• Ensure compliance with AIFMD transparency, reporting, and marketing requirements.

The regulatory requirements vary significantly between EU Member States, making a country-by-country assessment essential before approaching investors.

NPPR can be cost-effective for a small number of target markets, while the AIFMD passport generally offers greater scalability for broader European fundraising.

Luxembourg is Europe's leading fund domicile because it offers:

• Strong regulatory reputation.
• A well-developed ecosystem of AIFMs, administrators, depositaries, auditors, and legal advisers.
• Flexible fund vehicles.
• Tax-efficient and internationally recognised structures.
• Familiarity among European institutional investors.
• Access to AIFMD-compliant solutions and passporting opportunities.

For many non-EU managers, Luxembourg serves as the preferred gateway to European capital.

The SCSp (Société en Commandite Spéciale) is Luxembourg's special limited partnership.

Key characteristics:

• Contractual partnership structure.
• No legal personality.
• Typically tax-transparent.
• Managed by a General Partner (GP).
• Investors participate as Limited Partners (LPs).
• Highly flexible regarding governance, economics, and carried interest arrangements.

The SCSp is particularly popular for:

• Private equity.
• Venture capital.
• Private debt.
• Real estate.
• Infrastructure funds.

Its flexibility makes it one of the most commonly used Luxembourg fund vehicles for international managers.

The answer depends on the manager's objectives.

SCSp

Advantages:

• Maximum flexibility.
• Lower structural complexity.
• Tax transparency.
• Suitable for bespoke institutional strategies.

Best for: experienced managers, private equity and venture capital funds, and customised investor arrangements.

RAIF (Reserved Alternative Investment Fund)

Advantages:

• Regulated through an authorised AIFM.
• Eligible for AIFMD passporting.
• Faster launch than fully regulated funds.
• Strong institutional recognition.

Best for: cross-border European fundraising, managers targeting institutional LPs, and funds requiring a scalable EU distribution framework.

In practice, many managers use an SCSp as the legal vehicle combined with a RAIF structure, allowing them to benefit from both flexibility and regulatory credibility.

European LPs typically focus on:

Governance

• Independent oversight.
• Strong compliance framework.
• Clear decision-making processes.

Track record

• Consistent performance.
• Demonstrated execution capability.
• Realised exits where relevant.

Operational infrastructure

• Institutional-grade reporting.
• Risk management.
• Fund administration and audit arrangements.

Regulatory readiness

• AIFMD compliance.
• Appropriate marketing permissions.
• ESG and sustainability disclosures where applicable.

Alignment of interests

• GP commitment.
• Transparent fee structures.
• Investor-friendly governance terms.

Institutional investors increasingly evaluate not only performance but also operational and regulatory maturity.

Typical timelines vary depending on complexity:

Key factors affecting timing include:

• Investor requirements.
• Banking and AML onboarding.
• AIFM appointment.
• Service provider selection.
• Regulatory notifications.

Early planning can significantly reduce delays.

Dorhyan helps non-EU managers navigate European fundraising by providing:

• Regulatory assessment and market-entry analysis.
• Luxembourg fund structuring (including SCSp and related vehicles).
• AIFMD and NPPR pathway design.
• Coordination with AIFMs, legal counsel, administrators, depositaries, and other service providers.
• Due diligence preparation and investor-readiness support.
• Ongoing compliance and cross-border fundraising infrastructure.

Dorhyan's objective is to provide a turnkey framework enabling non-EU fund managers to access European institutional capital through compliant, investor-ready structures.