Roots of steel
Luxembourg’s roots lie deep in the iron and steel industry but the Grand Duchy has progressively diversified its activities.
The Grand Duchy of Luxembourg lies at the geographical heart of Europe and is now a front-ranking international financial centre.
It is one of the few countries in the world to have received an “AAA” rating from the three most important rating agencies thanks to its exemplary solvency and financial reliability.
Among other attributes, Luxembourg is the Eurozone’s leading private banking centre and the world’s second biggest investment fund payment address.
In view of these benefits, Luxembourg has become an attractive and very popular location for many venture capital funds, private equity funds, and institutions that wish to centralise their world-wide investments.
Stability in motion
Luxembourg has been chosen as an anchoring point in Europe by numerous international financial institutions and companies as well as by many private investors, owing its success to the combination of the following factors:
- its great political and social stability;
- a modern legal and regulatory framework, constantly adapted to market developments through permanent dialogue between the government, the legislative body and the private sector;
- one of the most competitive taxation systems for both individuals and companies;
- the concentration of top-level professionals in numerous financial niche markets and sectors;
- unique trans-border financial expertise;
- a strong culture regarding the protection of investors by attentive and skilled supervisory entities ;
- strict rules on the prevention of money laundering.
Doing business through Luxembourg
Luxembourg is an ideal location for international organisation (multinationals, private equity firms, investment funds…) and has a long history of being used for such purposes.
Luxembourg can, for example, be used as a location for headquarter, holding and intermediate holding companies. Such link-function is mainly based on Luxembourg’s know-how, multicultural population and an extensive Double Tax Treaty network.
This position is further enhanced by the existence of flexible thin capitalisation rules and the use of a variety of investment vehicles. The country is also known for its availability to enter into tax advance agreements. These agreements are granted on a case-by-case basis, in accordance with the specific circumstances, and valid for a period not exceeding 5 years.
In view of these benefits, Luxembourg has become an attractive and very popular location for many venture capital funds, private equity funds, and institutions that wish to centralise their world-wide investments. In this context, it must be emphasized that changes in Luxembourg tax legislation have usually been for the better as the Luxembourg Government is aware of the need to attract foreign investors and to keep them in Luxembourg.
A commitment by the government and all participants
In addition to the Duchy’s existing advantages, through the LUXFIN2020 Plan, the government and all participants in the world of finance are committed to:
- capitalising on Luxembourg’s expertise and continuing to develop the Duchy as a financial market place specialising in trans-border financial services;
- making its financial market place the European Union’s onshore centre of reference for providers of worldwide financial services;
- encouraging innovation and becoming Europe’s leader in digital financial services.
Find out more about Luxembourg
Luxembourg’s financial centre