DOING BUSINESS IN LUXEMBOURG

Choosing the right location for Private Equity houses means taking into consideration many different factors: Luxembourg scores high on hard factors (like legal structures and tax efficiency), but should not be underestimated on soft factors (like financial expertise, business friendliness and accessibility).

A strategic position

One of the prime features of Luxembourg’s success is its geographical location.

 

Luxembourg profits from a strategic position at the crossroads of Europe, with direct rail, road and air routes to the largest European cities:

the TGV brings Paris within a 2 hour reach while Brussels is 2 hours away by standard train.

 

Direct flights connect Luxembourg to London, Paris, Amsterdam, Frankfurt, Berlin, Munich, Milan, Geneva, Zurich and Copenhagen and, taking the highway, Frankfurt, Cologne and Brussels are only 2 hours away.

 

Paris: 40 min
Brussels: 35 min
Frankfurt: 40min
Zurich: 50 min
Milan: 1 hour
  London: 1 hour
  Paris: 40 min
  Brussels: 35 min
  Frankfurt: 40min
  Zurich: 50 min
  Milan: 1 hour
 

Skilled workforce

The Luxembourg labor market offers a pool of highly skilled and multilingual resources. With 173 nationalities represented, its workforce is truly international: out of every 10, 3 are foreign nationals and 4 commute from neighboring countries France, Germany and Belgium: this applies to 140,00 people who cross the borders on a daily basis to contribute to the skill-set available in Luxembourg.

 

Political stability

Luxembourg offers an outstanding living standard. Besides having one of the world’s highest per capita gross domestic products (source: IMF), it is one of the top ranking countries in terms of Human Development, Quality of Life, Personal Safety and Corruption Perceptions indices.

 

Luxembourg ranks 5th in a recent Newsweek study, comparing the world’s best countries in terms of health, education, economy and politics.

Choosing the right location for Private Equity houses means taking into consideration many
different factors. The following features are Luxembourg’s strengths – the combination of
these strengths makes Luxembourg attractive for Private Equity.
Political & economic stability
The political stability of Luxembourg is marked by a political culture of consensus where the traditional parties
coexist within the context of broad agreement on key issues. In this context, a group of key ministers have
been allowed to remain in government for a signifi cant period of time providing continuity in important policy
initiatives under successive coalition governments, with an emphasis on economic policies.
The business-friendly political environment is conducive to welcoming decision-makers and entrepreneurs.
Attracting international players is considered paramount in building an effi cient business framework and
economic growth, and has enabled Luxembourg to establish a permanent and innovative business community.
An illustration is the recent special tax regime for highly skilled workers aimed at attracting a specialized workforce
in areas such as Private Equity.
A stable and rewarding tax environment
The tax framework is considered among the most stable and rewarding in Europe for companies, their
shareholders and their employees. This is a key component of Luxembourg’s development. The tax authorities
lead a constructive dialogue with taxpayers, have a business friendly attitude and the quick and pragmatic
regime of advance tax agreements (“ATA”) respond to the requirements of international investors. Luxembourg
is not a tax haven but it offers one of the most fl exible and attractive tax regimes within the EU.
The strength of the Luxembourg fi nancial services industry
Luxembourg is the largest fi nancial center for investments funds in Europe and the second largest worldwide.
Promoters from 42 countries distribute their Luxembourg funds around the world through more than 42,000
distribution agreements: 75% of authorizations for distribution granted to worldwide funds are allocated to
Luxembourg funds. Luxembourg has been able to turn retail EU funds, the UCITS, into a brand that stands on its
own, not only within Europe but worldwide.
In view of the fact that almost 43,000 people are employed in the fi nancial services industry which contributes
around 26% of the gross domestic product (source: Statec, Nov. 2010) it is easily understandable why the fi nancial
industry and government are working closely and smoothly together to ensure continued effi ciency. Luxembourg
today hosts more than 500 entities servicing funds (regulated and unregulated), an industry that continues to
develop dynamically.Choosing the right location for Private Equity houses means taking into consideration many
different factors. The following features are Luxembourg’s strengths – the combination of
these strengths makes Luxembourg attractive for Private Equity.
Political & economic stability
The political stability of Luxembourg is marked by a political culture of consensus where the traditional parties
coexist within the context of broad agreement on key issues. In this context, a group of key ministers have
been allowed to remain in government for a signifi cant period of time providing continuity in important policy
initiatives under successive coalition governments, with an emphasis on economic policies.
The business-friendly political environment is conducive to welcoming decision-makers and entrepreneurs.
Attracting international players is considered paramount in building an effi cient business framework and
economic growth, and has enabled Luxembourg to establish a permanent and innovative business community.
An illustration is the recent special tax regime for highly skilled workers aimed at attracting a specialized workforce
in areas such as Private Equity.
A stable and rewarding tax environment
The tax framework is considered among the most stable and rewarding in Europe for companies, their
shareholders and their employees. This is a key component of Luxembourg’s development. The tax authorities
lead a constructive dialogue with taxpayers, have a business friendly attitude and the quick and pragmatic
regime of advance tax agreements (“ATA”) respond to the requirements of international investors. Luxembourg
is not a tax haven but it offers one of the most fl exible and attractive tax regimes within the EU.
The strength of the Luxembourg fi nancial services industry
Luxembourg is the largest fi nancial center for investments funds in Europe and the second largest worldwide.
Promoters from 42 countries distribute their Luxembourg funds around the world through more than 42,000
distribution agreements: 75% of authorizations for distribution granted to worldwide funds are allocated to
Luxembourg funds. Luxembourg has been able to turn retail EU funds, the UCITS, into a brand that stands on its
own, not only within Europe but worldwide.
In view of the fact that almost 43,000 people are employed in the fi nancial services industry which contributes
around 26% of the gross domestic product (source: Statec, Nov. 2010) it is easily understandable why the fi nancial
industry and government are working closely and smoothly together to ensure continued effi ciency. Luxembourg
today hosts more than 500 entities servicing funds (regulated and unregulated), an industry that continues to
develop dynamically.

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