Opening accounts in Luxembourg for funds
Common delays and practical solutions
Common delays and practical solutions
Find a quicker route to a Luxembourg fund account
Opening a Luxembourg bank account is essential for PE and VC funds, but onboarding commonly takes 3–6 months or longer, depending on your fund type and needs, due to limited bank capacity and competition. Ebury, a regulated specialist provider, offers a faster path: roughly two-week onboarding, fund-tailored account features, and broader currency and payment support across 20+ countries.
Key points
More about this guide
For Private Equity (PE) and Venture Capital (VC) funds domiciled in Luxembourg, opening an account in Luxembourg is essential.
It helps to maintain trust with investors, provides access to the local payment scheme, and fulfils Luxembourg tax substance requirements. However, for PE or VC funds operating cross-border, opening an account with a Luxembourg bank may be challenging.
Here, we will look at the difficulties faced by PE and VC funds in setting up in Luxembourg and possible solutions to set up their fund in Luxembourg faster and hassle-free.
Why opening a Luxembourg account isn't always straightforward
The client onboarding processes
The client onboarding processes run by Luxembourg based banks to ensure compliance with Anti Money Laundering (AML) and Know Your Customer (KYC) requirements can possibly take up to 3-6 months. During the onboarding process, quite often, no clarity is provided on if or when an account will be opened for a client.
Funds with specific characteristics
Funds with specific characteristics like having an entity in an offshore jurisdiction in the structure (for example, Cayman or Jersey), funds managing less than 100m USD Assets Under Management (AUM), or funds that only require transaction banking services (no depository or lending) tend to see even longer onboarding times or are forced to look at opening an account with banks outside of Luxembourg.
Lengthy onboarding times
Lengthy client onboarding times are not well suited to the pace of PE or VC deals, where time is of the essence, and any hold-up can lead to missed deal deadlines or delayed fund launches. This makes operating in Luxembourg as a PE or VC manager challenging.
The causes behind the delays
A high-cost base combined with a limited client onboarding capacity may make Luxembourg banks prioritise clients that generate high revenue and are easy to onboard (for example, non-complex structures and the absence of offshore jurisdiction in shareholding).
This sometimes results in Luxembourg banks focusing on clients where they can provide ‘full service’ (for example, depository services, lending, deposits, etc.) whether in Luxembourg or globally versus only offering transaction banking services.
Two factors behind the long wait
Niche specialisation in AML/KYC teams and processes in Luxembourg banks
This may lead to AML/KYC officers being required to cover the full spectrum of client types, from SMEs to corporate holdings and funds to individuals.
Limited competition between Luxembourg banks
The success of Luxembourg as a domiciliation jurisdiction has resulted in many potential clients approaching banks for transaction banking services with a limited number of Luxembourg banks to service them.
A high-cost base combined with a limited client onboarding capacity may make Luxembourg banks prioritise clients that generate high revenue and are easy to onboard (for example, non-complex structures and the absence of offshore jurisdiction in shareholding).
This sometimes results in Luxembourg banks focusing on clients where they can provide ‘full service’ (for example, depository services, lending, deposits, etc.) whether in Luxembourg or globally versus only offering transaction banking services.
What makes Ebury different
Ebury is a specialist provider with a streamlined operating model purpose-built for clients requiring transactional services such as accounts, payments, foreign exchange, and cash management.
Being regulated by the National Bank of Belgium in Belgium and by the Financial Conduct Authority in the UK, combined with a specialist operating model, results in a significantly lower cost base and lower per-client revenue requirement than most traditional providers in Luxembourg.
Ebury services many PE and VC funds with accounts, payments, and foreign exchange solutions from it's Luxembourg branch.
Global account solutions
We help you open transactional accounts in key jurisdictions, including Luxembourg, Singapore, USA, Hong Kong, and more easily and quickly. Plus, manage funds across 29+ currencies.
Currency risk management
A strategic approach to currency risk management for funds, managers and investors with tailored hedging solutions.
Global payments
An all-in-one payment platform to send and receive funds from all over the world. Specialisation in payments and collections from Africa, Asia, MENA and Latin America.
Here's what that means for your fund
2-week onboarding
Ebury has a specialised fund & corporate holding client onboarding team which understands the PE and VC fund setup and leverages technology to streamline the client onboarding process. Our experience in servicing PE clients, specialised products, and global footprint helps speed up the account opening process.
Designed for funds
Accounts are tailored to the requirements of PE and VC funds with features such as Luxembourg blocking certificates, real time foreign exchange execution, account pledges, tailored account permissions and authorisations, and online account statements.
Dedicated support
With our 38+ offices across the globe, including key investment jurisdictions – we can provide dedicated local support in operating the Ebury payment platform, payment execution, foreign exchange operations, and cash management.
Common questions about opening Luxembourg accounts
Why do offshore entities in a fund's structure slow down account opening?
Entities in offshore jurisdictions such as the Cayman Islands or Jersey require additional KYC documentation, including enhanced beneficial ownership verification. Many Luxembourg banks' general AML frameworks are not optimised for this analysis, which adds time and uncertainty to the onboarding process.
What does a Luxembourg transactional account with Ebury include?
For PE and VC funds, a transactional account tailored to fund operations includes features such as Luxembourg blocking certificates, real-time foreign exchange execution, account pledges, customised account permissions and authorisation hierarchies, and online account statements. These are the functional tools that fund managers and their investors expect to see in place.
Beyond the Luxembourg account itself, funds operating cross-border can open currency accounts in 20+ countries. They also benefit from transactions in 140+ currencies spanning 160+ countries, and currency risk management solutions that help funds, managers, and investors mitigate FX risk on cross-border capital flows.
For funds with portfolio companies or investors in Africa, Asia, the Middle East and North Africa, or Latin America, specialised payment and collection capabilities in those regions address a genuine operational gap that many transactional providers do not cover well.
What currency risk management tools are available to funds operating cross-border?
Funds managing cross-border capital flows can use Forward Contracts to lock in FX rates for future transactions, Options Contracts* for more flexible protection, and Non-Deliverable Forwards* for exposure in currencies where physical delivery is restricted. Each product carries its own risk profile, and funds should assess their specific exposure before entering into any arrangement.
*Note: Availability of FX products vary by jurisdiction based on regulatory requirements. Please contact our team to learn about products available in your country.
Glossary of terms
The information provided herein is general in nature and should not be construed as financial or investment advice. The information provided here is not legally binding. The information, data or views expressed here is for the exclusive use of the recipient and is subject to changes without any notice. You may ask the support team or your dedicated relationship manager to provide additional information regarding Ebury products.
Helping businesses unlock their global growth potential
Ebury is a global fintech powering international growth for ambitious businesses in a frictionless economy. With majority backing from Santander, we offer an integrated, cross-border platform for payments and currency risk management, together with local market expertise.
Ebury is a global fintech powering international growth for ambitious businesses in a frictionless economy. With majority backing from Santander, we offer an integrated, cross-border platform for payments and currency risk management, together with local market expertise.
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