MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Global Trends
Focus: Luxembourg
Emmanuelle Entringer– Senior Advisor
Investment Funds
Arendt & Medernach – Avocats
Why Luxembourg?
1. Its location
Ideally situated at the cross-roads between
France, Belgium and Germany, Luxembourg is
a small but highly stable country. Despite being largely referred to as offshore,
Luxembourg has no access to the sea, no shores, but one of the highest GDP per capita
in the world.
It is one of the six founding members of the European Union (EU) and a member of the
Eurozone. Luxembourg hosts the European Court of Justice, European Investment
Bank, European Court of Auditors and various departments of the European
Commission.
2. Its established financial center
Over the past 25 years, the Luxembourg financial sector has developed and became a
major international market player, offering a large diversification of products. It is now
home to over 140 banks, 3870 investment funds and 350 insurance and reinsurance
companies.
The legal and regulatory framework is comprehensive and offers a high degree of
flexibility which allows the development of tailor-made products and solutions.
This has proven particularly true with regards to the investment funds industry.
Luxembourg was the first EU Member State to implement European fund related
directives and has within a couple of decades developed into the second largest
investment fund centre worldwide, after the United-States, with over 2 trillion euro assets
under management by regulated investment funds.
3. Its favorable tax regime
Luxembourg’s tax regime is a key factor when considering how to structure an
investment and whether to use a regulated or unregulated vehicle. Luxembourg benefits
from a well-developed double tax treaty network which helps to avoid or reduce double
taxation in cross-border investment structures. There are 64 treaties currently in force,
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