Why Luxembourg? Reasons for setting up in the Grand Duchy
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Luxembourg is a small but wealthy country located in Western Europe. It has a population of around 525,000 and is renowned as an international financial center with a stable economy and AAA credit rating. Luxembourg has developed into a major hub for investment funds and private banking due to its business-friendly environment, extensive tax treaty network, and flexibility in structuring investment vehicles. It offers a prime location for multinational corporations and investors to base their business operations.
Why Luxembourg? Reasons for setting up in the Grand Duchy
- 1. João Verdades dos Santos International corporate lawyer “Barreau de Luxembourg” (List IV) & “Ordem dos Advogados” Portugal
- 2. Luxembourg
- 3. Luxembourg in a nutshell Population: 525,000 Size: 30 miles wide by 40 miles long; Borders with Belgium, France and Germany; Second richest country in the world (for IMF); Languages: French, German, Luxembourgish; English is widely used in Business. Luxembourg ranked 1st for Personal Safety in Mercer s Quality of Life Survey.
- 4. Luxembourg in a nutshell Renowned international financial centre (proactive business government, always encouraging foreign investments); Economically stable: low national debt (below 20% of GDP vs max 60% imposed by EU); AAA credit rating in all rating agencies: solid political and economical environment; Credibility of Luxembourg Banking system.
- 5. Why Luxembourg? Founding member of OECD and the EU; Stable governments – coalition culture; Business and entrepreneurial environment; Global Financial Centre: • more funds in Luxembourg than any other country apart from USA • 142 banks from 26 countries;
- 6. Why Luxembourg? The biggest wealth management centre in the Eurozone area; Main European and International Private Equity hub; Offers tax efficient investment vehicles; Developed IT and technology infrastructures; Logistics and global distribution platforms; Alternative location for maritime business.
- 7. Why Luxembourg? Pragmatic business approach from tax authorities facilitating cross border investments (holding, financing, real estate, etc.) and added value functions (IP management, distribution, entrepreneurial, etc.); Tax clearance mechanism available to secure tax treatment; Well known stability and predictability of Luxembourg tax framework.
- 8. Why Luxembourg? Extensive international tax treaty network (to date 67 treaties in force with recent focus to negotiate treaties with Asian, Middle Eastern and Latam countries); Luxembourg maintains competitive strategic trade and investment relationships outside EU: USA, Canada, Brazil, China, Middle East); Luxembourg is also active in cooperation for development (microfinance).
- 9. Luxembourg Double Tax Treaties Network
- 11. Luxembourg Companies Commercial Companies: • Private limited company (S.à r.l) • Public Limited company (S.A.) • Limited Partnership by shares (S.C.A) • Limited Partnership (S.C.S) • General Partnership (S.N.C); Limited Partnership and General Partnerships although tax transparent have legal personality.
- 12. Investment Structures SOPARFI – Holding company; SPF – Family wealth company – tax exempt entity for management of family owned assets; SIF – Specialized investment fund – tax exempt and lightly regulated used for alternative investments and diversified assets; SICAR – Tax advantaged vehicle for the management of equity in venture capital or private equity.
- 13. Investments - UCITS Funds Undertakings for Collective Investment in Transferable Securities (EU Directive 85/611/CE of 20 December); Luxembourg was the first country to implement the UCITS Directive; The Grand Duchy played an important role in the creation of an European market for retail investment funds,
- 14. Investments - UCITS Funds Large number of promoters from Switzerland and USA selected selected Luxembourg as a gateway to the European market; The strong regulation of UCITS and high level of investor protection have made them popular with supervisory authorities and retail investors all over the world.
- 15. Investments - UCITS Funds Luxembourg is a leading investment fund centre in Europe and second one in the world behind the United States; Luxembourg UCITS have a large market share in Asian and Latin American countries Flexibility in fund design, allowing products to be tailored to the needs of each specific market or client group;
- 16. Our Idea is to Offer tailor made legal, corporate and tax efficient solutions to individuals (HNWI, Entrepreneurs), corporations, law firms, consultants, financial institutions and banks. Target Portuguese speaking countries and expat communities (including Luxembourg) Promote Luxembourg as a gateway to cross border investments.
- 17. Conclusion Luxembourg is a well know mature international regulated and flexible financial centre; Global hub for the fund industry; Booming IT, Ecommerce and Start-up Environment; Prime location to setup your business.
- 18. Thank you !!
- 19. Contacts João Verdades dos Santos Avocat/Advogado 14A, rue des Bains L-1212 Luxembourg gsm: (+352) 661822047 - office: (+352) 27858688 fax: (+352) 462181 skype: dr_verdades_dos_santos www.linkedin.com/in/jmvsantos joao.verdadesdossantos@barreau.lu vs@drvs.lu