A gate stack including a gate dielectric and a gate electrode is formed over at least one compound semiconductor fin provided on an insulating substrate. The at least one compound semiconductor fin is thinned employing the gate stack as an etch mask. Source/drain extension regions are epitaxially deposited on physically exposed surfaces of the at least one semiconductor fin. A gate spacer is formed around the gate stack. A raised source region and a raised drain region are epitaxially formed on the source/drain extension regions. The source/drain extension regions are self-aligned to sidewalls of the gate stack, and thus ensure a sufficient overlap with the gate electrode. Further, the combination of the source/drain extension regions and the raised source/drain regions provides a low-resistance path to the channel of the field effect transistor.