luxembourg: the domicile of choice for financial services - alfi
TRANSCRIPT
your guide
luxembourg: the domicile of choice for financial services
“Establishing ArcelorMittal’s corporate headquarter in Luxembourg
after the merger has proven to be an excellent decision. The advantages
of Luxembourg lie not only in the presence of its successful financial
centre and well educated international workforce, but also in the closeness
and reactivity of its government and administrations, straightforward
and flexible financial and fiscal regulation, multilingual environment,
and high quality of life for our employees.”
Lakshmi N. MittalChairman and Chief Executive Officer, ArcelorMittal
“BBH has its largest international office in Luxembourg and
it is a center of excellence for our Investor Services business.
The combination of language capabilities and favourable business climate
make this central European location ideal for growing any franchise.”
Susan LivingstonBBH and Co. Partner, Fund and Asset Management Division, Chairman BBH (Luxembourg) SA and Honorary Consul General to Luxembourg for Massachusetts.
“The Luxembourg Government whole-heartedly supports
the financial industry in its efforts to cater for the long term saving
needs of investors through safe and well regulated products.”
Jean-Claude JunckerPrime Minister
Cover photo: Mudam Luxembourg, Musée d’Art Moderne Grand-Duc Jean, I.M. Pei, Architect Design. Photo: Christian Aschman
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table of contents
I. Contacts 4
II. Sights on Luxembourg 6
III. A Business-Friendly Environment 8
Financial and Political Stability 8 1. Financial and Fiscal Stability 8 2. Political Stability 8 3. Country Risk
Tax 11 1. Personal Income Tax 11 2. Tax on Companies 11 3. Value Added Tax (VAT) – Application of the EU VAT Package 11 4. Double Taxation Treaties 11
Business Infrastructure 12 1. Luxembourg government access and support 12 2. Office Space 13 3. Transport 13 4. Telecommunications and Internet 14
Immigration 15 1. Entry and residence requirements for EU, EEA and Swiss nationals and their family members 15 2. Entry and residence requirements for non-European nationals 15
Labour, Healthcare and Pensions 17 1. Labour Market 17 2. Healthcare 17 3. Pensions 17
IV. High Standard of Living 19 A Cosmopolitan Environment 19 Standard of Living 19 UNESCO World Heritage 22
V. Focus on the Luxembourg Fund Industry 23 Luxembourg Financial Sector 23 Investment Funds in Luxembourg 23 Association of the Luxembourg Fund Industry 24
VI. A great place to live and work 27
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Ministry of Economy and Foreign Trade (Ministère de l’Economie et du Commerce Extérieur)Mr Jean-Claude Knebeler / Mr Loïc Bertoli 19-21, boulevard RoyalL-2449 LuxembourgTel: (+352) 24 78 24 78Fax: (+352) 46 04 [email protected]
Ministry of Foreign Affairs – Immigration Directorate (Ministère des Affaires Etrangères – Direction de l’Immigration)B.P. 752L-2017 LuxembourgTel: (+352) 24 78 40 40Fax: (+352) 22 16 08 www.mae.lu
Financial Sector Supervisory Authority (Commission de Surveillance du Secteur Financier – CSSF)Ms Danièle Berna-Ost110, route d’ArlonL-2991 LuxembourgTel: (+352) 26 25 1 1Fax: (+352) 26 25 1 [email protected]
Insurance Sector Supervisory Authority (Commissariat aux Assurances)7, boulevard Royal L-2449 LuxembourgTel: (+352) 22 69 11 1 Fax: (+352) 22 69 10 [email protected]
ALFI (Association of the Luxembourg Fund Industry)
François Drazdik / Pierre Oberlé 59, boulevard RoyalL-2449 LuxembourgTel: +352 22 30 26 1Fax: +352 22 30 [email protected]
I. contacts
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Institut de Formation Bancaire Luxembourg (IFBL) Customer ServiceL-1615 LuxembourgTel: (+352) 46 50 16 1Fax: (+352) 46 50 [email protected]
Insurance Companies Association (Association des Compagnies d’Assurances)B.P. 29L-8005 Bertrange75, rue de MamerL-8081 BertrangeTel: (+352) 44 21 44 1Fax: (+352) 44 02 [email protected]
Luxembourg for Business19-21, boulevard RoyalL- 2449 Luxembourg,Grand Duchy of LuxembourgTel: (+352) 24 78 41 16Fax: (+352) 22 34 [email protected]
Fondation de LuxembourgMrs. Tonika Hirdman59, boulevard RoyalL-2449 LuxembourgTel: (+352) 27 47 48 1Fax: (+352) 47 48 [email protected] www.fdlux.lu
Luxembourg Stock Exchange (Bourse de Luxembourg)Mr Hubert Grignon Dumoulin11, avenue de la Porte-NeuveL-2227 Luxembourg B.P. 165 Tel: (+352) 47 79 36 1 Fax: (+352) 47 32 98 [email protected]
Luxembourg for FinanceMr Jean-Jacques Picard 59, boulevard RoyalL-2019 Luxembourg Tel: (+352) 27 20 21 1Fax: (+352) 27 20 21 399www.lff.lu
Chamber of Commerce (Chambre de Commerce)International Department L-2981 LuxembourgTel: (+352) 42 39 39 1Fax: (+352) 43 83 [email protected]
The Luxembourg Bankers’ Association (Association des Banques et Banquiers Luxembourg – ABBL)Mr Philippe von Restorff59, boulevard RoyalL-2449 Luxembourg B.P. 13L-2010 LuxembourgTel: (+352) 46 36 601 Fax: (+352) 46 09 21 [email protected]
The Grand Duchy of Luxembourg offers a cosmopolitan, multicultural and international business environment in the heart of Europe. Newsweek ranked Luxembourg as the 5th best country in the world in its first-ever ranking, on the basis of education, health, quality of life, economic competitiveness and political environment.1
Our resident population of over 500,000 includes a large number of people from other countries – a full 40% of the total population, representing no fewer than 173 nationalities. In addition, every day more than 140,000 people cross the borders of neighbouring France, Germany and Belgium to work in Luxembourg. Luxembourg has three official languages – Luxembourgish, French and
German – but English is widely spoken, as are many other languages such as Portuguese, Italian and Spanish.
Competitive advantages including our interna-tional reputation, tax efficiency and business-oriented environment have attracted financial institutions and professionals from all over the world. Today, Luxembourg hosts nearly 150 banks and is the world’s second largest investment-fund centre after the United States, with fund assets under management totalling over EUR 2 trillion at 30 June 2010. We are also the leading centre for cross-border fund registrations, with UCITS funds registered for distribution in over 50 countries worldwide.
Photo: Olivier Minaire 1 Source: Newsweek, “The Best Countries in the World”, August 23 & 30, 2010
II. sights on luxembourg
Luxembourg is conveniently located at the crossroads of European motorway and rail networks, and our attractive, modern airport offers easy connections to destinations across Europe and around the world.
We are a founding member of a large number of European and international organisations, among them the European Union, the United Nations, the Council of Europe, the Organisation for Economic Cooperation and Development (OECD) and NATO. Luxembourg also hosts the headquarters of European Union institu-tions such as the European Court of Justice, the European Parliament and the European Investment Bank.
Last but not least, Luxembourg has a long history of welcoming people from other countries, with a strong economy ensuring a high standard of living. Following the indus-trialisation of the mining basin in the early 20th century, which attracted thousands of foreign workers, the 1980s saw a successful transition to new areas of activity, leading to the development of what is now one of the world’s most important financial centres.
Combining innovative flair and professional expertise, Luxembourg is the ideal location to set up or expand your business in the financial sector.
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1. Financial and Fiscal Stability
Luxembourg is a highly stable EU Member State with sound public finances, relatively low government debt and low public deficits, which are the best guarantee of fiscal stability.
According to Fitch Ratings, Luxembourg’s current public finances place it among the strongest of all triple-A rated sovereign issuers.1
Standard & Poor’s summarizes the economic strengths of Luxembourg as follows:2
Pronounced political stability and a consensus on prudent management of public finances.
Strong, albeit gradually weakening public sector balance sheet, with the general government in a net asset position.
Very high levels of wealth.
2. Political Stability
Luxembourg is a parliamentary representative democracy with a constitutional monarch and a stable government. It is a founding member of the EU, NATO, the OECD, the United Nations and the Benelux Union, reflecting a political consensus in favour of economic, political, and military integration.
According to Fitch Ratings, Luxembourg is among the leaders on measures of development and governance, with the highest per-capita GDP and one of the top rankings in Human Development and Corruption Perceptions Indices.3
3. Country Risk
Country risk (also known as political risk) refers to the risk of investing in a country, associated with the possibility of changes in the local business environment adversely affecting operating profits or the value of assets. Financial factors such as currency controls, devaluation and regulatory changes entail operational risks, as do security factors such as riots, civil war and other disturbances.
In a recent country-risk survey published by Euromoney, Luxembourg topped the list of the world’s least risky countries with a score of 99.88 out of 100.4
Financial and Political Stability
III. a business friendly environment
1 Source: Fitch Ratings Ltd., Credit Analysis, Luxembourg, 2009. 2 Source: Standard & Poor’s, Ratings Direct, 2009, Luxembourg.3 Source: Fitch Ratings Ltd., Credit Analysis, Luxembourg, 2009. 4 Source: Euromoney Online, Country Risk Survey, 2009.
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1 Source: European Commission, Eurostat, 2009. 2 Source: European Commission, Eurostat, 2009.
EU institutions and agencies headquartered in Luxembourg include the EU Court of Justice, the European Investment Bank, the European Parliament and Secretariat of the European Commission.
More information is available on the homepage of the Central Service for Statistics and Economic Studies (STATEC – www.statec.lu).
Luxembourg’s gross domestic product (GDP) per capita compared within other eurozone countries and the United Kingdom.1
Government Debt and Deficits in the eurozone and the United Kingdom 2
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Investment Agreements
Within the framework of the Economic Union between Luxembourg and Belgium (Union économique Belgo-Luxembourgeoise or UEBL), Luxembourg has signed agreements to promote and mutually protect investments in and from a number of third countries.
The aim is to consolidate investment flows and offer investors maximum protection with provisions for adequate compensation in the event of nationalizations, free movement of capital and most-favoured nation status to ensure equal treatment of investors. The agreements also provide an extensive legal framework for the settlement of disputes relating to investments.
To date, UEBL has signed agreements with more than 50 countries.
Source: Eurostat
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1. Personal Income Tax
Personal taxation and social-security regimes for people working in Luxembourg are very competitive compared with those in other European countries. The marginal tax rate at 30 June 2010 was 38.95% and social-security contributions are largely capped.
For further information, visit the website of the Luxembourg Direct Tax Authorities www.impotsdirects.public.lu
Luxembourg paying agents withhold tax on interest income at a flat rate of 10%.
2. Tax on Companies
Over recent years Luxembourg has attracted a number of large international companies and financial institutions, reflecting the appeal of its infrastructure, its multicultural workforce, competitive taxation and business-friendly environment. Company taxation includes corporate profit tax, valued added (sales) tax and social security contributions for employees.
Luxembourg tax authorities are also available for consultations on demand with investors.
3. Value Added Tax (VAT) – Application of the EU VAT Package
Luxembourg VAT rates are currently the lowest in the EU, which has encouraged e-businesses to move their European operations to Luxembourg to gain an edge in pricing.
For further information, please consult the website of the Luxembourg Indirect Tax Authorities: www.aed.public.lu
4. Double Taxation Treaties
Luxembourg has signed, and continues to sign and apply, a large number of treaties with EU and non-EU countries to avoid double taxation of individuals and companies resident for tax in another country.
The complete list of the double taxation treaties signed by the Luxembourg government is available at www.impotsdirects.public.lu
Tax
Switzerland Luxembourg Ireland UK Germany Netherlands France Belgium
Total cost for employers
106 111 111 110 111 107 149 132
Minus tax/social security employers
6 11 11 10 11 7 49 32
Gross salary (t=100) 100 100 100 100 100 100 100 100
Minus tax/social security employees
25 28 30 33 35 43 29 48
Net employees 75 72 70 67 65 57 71 52
Ratio Net Cost (%) 71 64 63 61 59 53 48 39
Labour Costs 2008 annual gross salary of €100,000 – Married / 2 children
Source: ALFI, Luxembourg Where Else, 2010
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Business Infrastructure 1. Luxembourg government access and support The Luxembourg government has consistently pursued pro-active economic development policies. Easy access to decision-makers such as cabinet members and senior civil servants is a key pillar of growth in the Luxembourg economy.
Luxembourg’s international network of trade and investment offices promotes its place as a premium location for companies and financial institutions eager to expand into Europe. Its
business-friendly environment has attracted the European headquarters of many global com-panies, among them Amazon, eBay, DuPont Teijin Films, Fanuc (robotics and CNC), Goodyear, Guardian and Rakuten. There are also a number of multinational companies with global headquarters in Luxembourg, among them ArcelorMittal, SES, Delphi (powertrain systems) and Cargolux. Legislation is in many cases drawn up in consultation with the industries concerned. This applies in particular to the financial sector in areas such as investor protection and prevention of money laundering.
Photo: Olivier Minaire
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2. Office Space
Steady growth in demand for office space has spurred construction and many high-quality buildings are now available, including new offices featuring state-of-the-art equipment and energy-efficient, environment-friendly design.
3. Transport
Luxembourg has efficient road, rail and air transport facilities and services. The road
network has been significantly upgraded in recent years with 147 km of motorways connecting the capital to three major European cities: Paris, Brussels and Frankfurt. With the advent of high-speed rail (TGV) services in 2007, Luxembourg is only 2 hours and 15 minutes from Paris.
Luxembourg city airport offers flights to over 50 European cities. Several flights a day serve Europe’s major business centres and cities such as London, Frankfurt, Paris, Zurich, Amsterdam and Berlin.
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III. a business friendly environment
Internet Data Interchange – Top Ten
Luxembourg ranks 2nd worldwide in the International Telecommunications Union ICT Development Index and 8th in the Global
Broadband Quality Study 2009 by the University of Oxford and the University of Oviedo. 1
4. Telecommunications and Internet
The telecommunications industry in Luxembourg is deregulated and extensive deployment of electronic networks has allowed healthy competition between operators, with modern fibre optic and cable connections available throughout the country.
A central position in Europe, a stable economy and low taxes make Luxembourg the ideal gateway to European telecommuni-cations markets. Several providers connect Luxembourg to major European data hubs and over 10 regulated data centre operators are based in Luxembourg.
1 Source: ITU, Global Report, 2009
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The new immigration law that came into force in 2008 significantly simplified pro-cedures with regard to entry, residence and working requirements for non-nationals in Luxembourg.
1. Entry and residence requirements for EU, EEA and Swiss nationals and their family members
EU, EEA and Swiss nationals are allowed to enter and stay in Luxembourg for a period of up to three months on simple presentation of a national identity card or valid passport. Any of their family members who are not EU nationals have the right to enter and stay for a period of up to three months on presentation of a valid passport and visa where required.
EU, EEA and Swiss nationals can stay for more than three months if they can show that they are self-employed or employed, students, or provide evidence of sufficient resources for themselves and their family members as well as of adequate health insurance. They must register at the local town hall within three months of their arrival in Luxembourg and are immediately issued with a document confirming registration.
Family members of EU, EEA and Swiss nationals who are not EU nationals must apply for a residence card at the local town hall. The card is issued by the Immigration Directorate of the Ministry of Foreign Affairs.
EU, EEA and Swiss nationals as well as any of their family members who are non-EU nationals have free access to the labour market. However, the restrictions provided for in the Accession Treaty mean that nationals of Bulgaria and Romania, as well as any family members who are third-country nationals, still need to obtain a work permit during the first year after accessing labour market.
Entry and residence requirements for citizens of the European Union (EU), the European Economic Area (EEA) and Switzerland (1) differ from those for citizens of other coun-tries (2).
2. Entry and residence requirements for non-European nationals
2.1. Entry
Non-EU nationals entering Luxembourg must meet the conditions defined in the rules governing the Schengen Area.
The Schengen Area comprises 25 EU Member States,1 Switzerland, Norway and Iceland. Ireland and the United Kingdom are currently the only EU Member States to have negotiated an opt-out.
The Schengen Area operates very much like a single country for international travel pur-poses, with border controls for people coming in and out, but no internal border controls.
Non-EU nationals must have a valid passport and, in some cases, a visa. A complete list of the countries whose citizens need a visa may be found on the website of the Ministry of Foreign Affairs (www.mae.lu), together with information about required documents.
Non-EU nationals may be refused entry on the grounds of records in the Schengen Information System (SIS), if they have previously been refused entry or if they are a threat to public security or health. They must show the reasons for their visit and evidence of sufficient resources for their stay and return, as well as of adequate health insurance.
These conditions apply regardless of the length of their stay.
Immigration
1 Bulgaria, Cyprus, and Romania have not yet implemented the Schengen Agreement into national law, but are required to do so.
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2.2. Staying for less than three months
Non-EU nationals staying in Luxembourg for less than three months must meet the entry conditions outlined above. Within three days of their arrival in Luxembourg, they must declare themselves at the town hall of the place they plan to live or at the hotel where they are staying.
Non-EU nationals staying in Luxembourg for less than three months are in general not entitled to work unless they have a permit. However, this is not required for periods of less than three months in some cases, such as where the purpose is to visit business partners, develop contacts, negotiate contracts or to attend trade fairs or board meetings.
2.3 Staying for more than three months
Non-EU nationals wishing to stay in Luxembourg for more than three months must apply to the Immigration Directorate of the Ministry of Foreign Affairs for an authorisation to stay (before entering the country) and fulfil condi-tions for one of the types of authorisation provided for by law. These concern salaried employees (including sub-categories such as transferred and highly skilled workers), independent/self-employed professionals, sports people, school and university students, trainees and volunteers, researchers and family members, with provision also made for personal and exceptional reasons as well as long-term residence.
On receiving authorisation to stay, applicants who do not need a visa must enter Luxembourg
within 90 days and those that do require a visa must apply for one within 90 days.
When they arrive in Luxembourg, they must apply for a residence permit, a procedure involving in particular registration at the town hall and a medical examination.
Recent changes to immigration law did away with the separate work permit previously required for non-European nationals wishing to work in Luxembourg. Non-EU nationals with a residence permit can travel inside the Schengen Area for three months out of every six, but do not have free access to the labour markets of other Schengen member states.
The family members of a resident may also apply for residence permits (family reunifica-tion) provided that the resident previously obtained a residence permit valid for at least one year, has resided in Luxembourg for at least 12 months and will be eligible to apply for a permanent residence permit in the near future.
These conditions do not apply to residents who have obtained residence permits as highly skilled workers, which require a minimum of five years of higher education or specialised professional experience, as researchers or as transferred employees. If the resident is a single parent, his or her children are also exempted.
Family members who may apply for an authorisation to stay include, among others, spouses, civil partners (in cases where such partnerships are legally recognized) and unmarried children under 18 years of age.
For further information, please visit the following websites:
Ministry of Foreign Affairs (www.mae.lu) Citizens Advice Bureau in Luxembourg
City – Bierger Center (www.vdl.lu) Citizens Advice Bureau in Esch-sur-Alzette – Bierger Center (www.esch.lu)
The Law of 29 August 2008 on Freedom of Movement and Immigration, available at www.legilux.lu
The online portal De Guichet offers a one-stop service for citizens and companies to carry out administrative formalities (proce-dures, online forms, downloadable forms and advice). Accessible at www.guichet.lu
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3. Pensions
Luxembourg has a three-pillar pension system: The state pension system applies to all persons working in Luxembourg. In addition, there are several types of occupational retirement vehicles, such as complementary pension schemes set up by an employer. Finally, individual pension vehicles are available and benefit from a special tax regime.
The legal retirement age in Luxembourg is 65, although employees can – subject to certain conditions – qualify for an early pension at the age of 57. In principle, an employee must have been registered with the Luxembourg social security authority for at least 120 months to receive his or her full old-age pension.
For employees who are citizens of EU and EEA member countries (the latter including Liechtenstein, Iceland, and Norway), as well as for Swiss nationals, the Luxembourg social security authority in principle accepts the insurance periods to which an employee is entitled under foreign legal provisions. Note that this is not applicable to non EU-nationals unless Luxembourg has signed bilateral conven-tions with a third country (“treaty country”) providing for specific provisions in this respect.
Both employers and employees contribute 8% into the state pension fund. The employee’s share is deducted from his or her monthly gross salary.
Luxembourg pensions are calculated on the basis of a 40-year pay-in period. For each year beneath this 40-year minimum, 1/40 of the minimum pension is deducted. Employees can also choose to participate in an optional state pension fund.
Luxembourg will also pay out the Luxembourg state pension to a retiree residing in another country without any reduction, modification or suspension of the amount of the pension, depending on the individual case.
For further information, please contact www.cnap.lu, the national pension insurance administration.
1. Labour Market
The Grand Duchy’s demographics are reflected in labour-market structures, with people from other countries accounting for more than 70% of the working population. Immigrants (foreign residents) make up part of this total, while commuters from neighbouring countries also represent a large proportion. Benefiting from its central geographical position, Luxembourg has been able to round out its multilingual workforce with personnel from the UK, Ireland, Belgium, France, Germany and other countries, who together make up a dynamic expatriate community.
The financial sector employs over 42,000 people, not counting the employees of service providers such as auditors and lawyers.
2. Healthcare
In Luxembourg, all workers are automatically covered by one of the country’s health insur-ance funds. Depending on the nature of the treatment, this covers between 80 and 100% of the fees charged by doctors and dentists.
All doctors operate within the framework of the national healthcare system and must charge regulated fees to patients holding a European health insurance card or an equivalent certifi-cate of insurance.
Patients generally pay medical fees and then apply for reimbursement at a health insurance centre, presenting the doctor’s bill and proof of payment.
Health insurance also covers children and spouses / partners.
Labour, Healthcare and Pensions
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Insurance Max. liable for contribution
Categories per year per month Employee’s part Employer’s part
Health Insurance – Rate CNS
Health (rate on salary) € 102,226.98 € 8,624.04 2.95% 2.95%
Health (rate on bonus) 2.70% 2.70%
Health Care – Contribution Rate Mutual Insurance1 € 102,226.98 € 8,624.04 2.1% 2 0.88% to 2.01%1
Pension € 102,226.98 € 8,624.04 8.00% 8.00%
Care insurance / / 1.40% /
Health at work € 102,226.98 € 8,624.04 / 0.11%
Accidents:rates ranging from ... to ...
€ 102,226.98 € 8,624.04 / 0.45% to 6.00%
Total (without costs for sickness insurance on gratification) 12.35% to 14.45% 12.39% to 19.07%
rate of financial absenteeism
0% to < 0.75%
0.75% to < 1.75%
1.75% to < 2.75%
>_ 2.75%
contribution rate 0.88% 1.36% 1.77% 2.01%
The contribution rate in the amount of 2.1% which is to be paid by “blue collar” workers, is an extra premium.
Current social security contribution rates (as at 1st July 2010)
1 The contribution rate for Mutual Insurance depends on the risk class to which the employer belongs to and which depends on the rate of financial absenteeism of wage-earners in the company:
2 This percentage is not applicable to “white collar” workers.
It will be deducted from the salaries of “blue collar” workers.
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1 Source: Statec, January 2010
A defining characteristic of the Grand-Duchy of Luxembourg is the diversity of its people and the ease of integration into the community.
Luxembourg has witnessed strong population growth since the end of the 19th century, with a steady inflow of immigrants boosting the number of inhabitants from around 200,000 in 1900 to 502,066 today. 1
With nearly 43% of the population born in other countries, there are 200,000 foreign residents out of a total population of half a million. In Luxembourg City, the percentage
The Grand Duchy of Luxembourg enjoys one of the highest standards of living in the world.
1. Schools and Childcare
Primary and Secondary Schools
Luxembourg offers free education and requires two years of preschool, six years of primary school and seven years of secondary school. Any child reaching the age of six before 1 September must begin primary school that year.
Luxembourg’s state secondary schools teach traditional subjects that prepare students for higher education. Secondary school lasts seven years and includes three years of specialisation.
International Schools in Luxembourg
The International School of Luxembourg (ISL) provides teaching in English for students ranging in age from 3 to 18 (www.islux.lu).
The European School is primarily for families of European Community employees and has classes in most EU languages (www.euroschool.lu).
of foreign residents is nearly 64%. People from more than 170 countries live together in Luxembourg; main foreign communities are the Portuguese and French, followed by Italians, Belgians and Germans.
The high proportion of foreign residents has not led to any intercultural tension, testifying to the success of Luxembourg’s model for integration.
Luxembourg is a trilingual country with German, French and Luxembourgish all official languages. English is also widely spoken and is taught in Luxembourg schools from an early age.
Saint George International School caters to children of all nationalities aged 2 to 11 who want a comprehensive curriculum in English.
Ecole Française de Luxembourg (EFL) offers teaching in French for children of all nationalities from the age of 3.
Lycée Français Vauban provides a French-language education for students aged 12 to 18. EFL and Lycée Vauban are both recognised by the French Education Ministry.
Luxembourg University
Luxembourg University (www.uni.lu) was created in 2003 and has three faculties. Highly rated degree programmes include a Master’s in Business and Finance awarded by the Luxembourg School of Finance (LSF), part of the Finance Department of the Faculty of Law, Economics and Finance.
Childcare
Luxembourg offers a large number of public and private day-care centres for babies and children.
A Cosmopolitan Environment
Standard of Living
IV. high standard of living
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2. Culture
Museums The National Art and History Museum houses archaeological collections (prehistory, protohis-tory, the Gallo-Roman period and the Middle Ages), art collections (ancient, modern, contem-porary and Luxembourgish) and is dedicated to the decorative arts and folk art and traditions.
The National Museum of Natural History offers visitors new insights into human beings and their environment, science, natural history and the wonders of our planet.
The Luxembourg City History Museum’s permanent collections and temporary exhibi-tions illustrate the capital’s history over more than a thousand years.
The Luxembourg Casino holds contemporary art exhibitions throughout the year, with a focus on the diversity and complexity of current trends.
The Grand Duke Jean Modern Art Museum, designed by the renowned architect I. M. Pei, hosts all genres of contemporary art.
Music
The Luxembourg Philharmonic Orchestra has been a pillar of the cultural life of Luxembourg since its creation in 1933. It is now Luxembourg’s national orchestra and has its own season at the Philharmonie Luxembourg concert hall.
Another important venue is the Grand Théâtre de la Ville de Luxembourg, which welcomes and co-produces operas, musical theatre, dance shows and plays from around the world.
The Philharmonie Luxembourg’s bold design – the work of French architect Christian de Portzamparc – provides an outstanding setting for concerts. Seating 1,500, it plays a vital role in stimulating Luxembourg’s already rich musical life and involving the community at large.
The Rockhal, a complex managed by the public-sector Centre for Amplified Music, is increasingly
a focus of pop-rock music for Luxembourg and neighbouring areas, with room for over 7,000 people. Concert halls with seating for 5,400 offer a full programme of jazz, rock and pop.
Regular musical events also include the Blues & Jazz Rallye and the Luxembourg festival.
Cinemas
Luxembourg has a large number of cinemas. Film buffs can choose between small traditional cinemas and a multiplex in Luxembourg-Kirchberg.
Contrary to the practice in countries such as France and Germany, where most films are shown in dubbed versions, almost all films in Luxembourg are shown in their original language with subtitles, reflecting the multilingual environment.
Sports
Outstanding sports facilities in Luxembourg include the Coque centre located in the heart of the Kirchberg distinct, which has several swim-ming pools, one of them Olympic-sized (50 m). It also has a spa and fitness and personal care area.
A recent addition in this area is the Les Thermes spa and fitness centre, which opened its doors in Strassen near Luxembourg City in 2009 and features the latest premium equipment.
Special mention should also be made of the renowned thermal baths at Mondorf-les-Bains, which have the most modern facilities in Europe and offer a wide range of made-to-measure programmes.
Leisure activities available throughout the year include tennis tournaments, archery, lawn bowling and more.
Almost all towns in Luxembourg have both indoor and outdoor tennis courts, and horse riders enjoy access to high-quality facilities and many riding clubs.
The country has a large number of wonderful golf courses, including the Grand-Ducal Golf Photo: Christian Aschman
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Mercer Quality of Living Surveys
Recent Mercer surveys place the city of Luxembourg among the top five cities in the world. The table below compares Luxembourg with its European competitors.
Rankings are based on a point scoring index and cities are compared to New York as the base city, with an index score of 100. The quality of living survey covers 215 cities and is conducted to help governments and major companies place employees on international assignments.
The Quality of Living Survey of Mercer Human Resource Consulting ranks 50 cities around the world for personal safety, placing Luxembourg ahead of Geneva, Zurich, Helsinki and Bern, which together share second place. The survey identified cities with the highest personal safety ranking compared with other countries, internal stability, crime and effectiveness of law enforcement. 1
1 Source: Mercer Studies, 2009
Switzerland Germany Netherlands Ireland France UK Luxembourg Ranking
Quality of Living 107.47 105.58 105.70 103.60 102.40 101.60 104.60 4th
Cost of Living 107.20 80.97 85.70 87.40 95.10 92.70 82.10 2nd
Infrastructure 101.37 103.58 101.00 N/A 103.10 100.13 N/A N/A
UNESCO World Heritage
Club, the Kikuoka Country Club, the Golf de Clervaux, the Christnach Golf and Country Club, the Golf de Luxembourg and the Gaichel Golf Club.
Cyclists benefit from an extensive network of bicycle paths and hiking is a popular activity, reflecting the large number of attractive, well-maintained trails across Luxembourg. The Grand Duchy also offers prime sites for rock climbing near Berdorf in the Müllerthal area.
The Haute-Sûre and the Echternach Lakes are important leisure destinations with scope for activities that include swimming, sailing, canoeing, pedal boating, surfboarding and fishing.
A number of skating rinks are available and snowfalls offer opportunities to take advantage of cross-country skiing trails in the Ardennes in the northern part of the country.
UNESCO has placed more than 860 sites of outstanding universal value on the world heritage list. Three are in Luxembourg: the fortress of Luxembourg and the old city of Luxembourg, dating from the 10th century AD
the photographic exhibition “The Family of Man” curated by Edward Steichen
the Dancing Procession of Echternach, the last traditional dancing procession in Europe and a candidate for UNESCO recognition as Intangible Cultural Heritage.
23
Rapid development since 1980 has made the financial sector the key driver for Luxembourg’s economy. An attractive legal framework and a favourable tax regime encouraged the arrival of holding companies, followed by international banks and invest-ment funds, also known as undertakings for collective investment (UCIs).
Luxembourg’s status as an international financial centre has been the main factor behind its impressive growth over the past three decades. The country hosts nearly 150 banks,
Over the years, Luxembourg has grown to become the second largest fund centre in the world after the United States, with over € 2 trillion in assets under management at 30 June 2010.
Luxembourg has established a competitive legal framework for UCITS (Undertakings for Collective Investment in Transferable Securities), funds “passported” within the EU, and non-UCITS funds, to become the largest global distribution centre for investment funds in Europe and the world.
In 2007, new legislation introduced Specialised Investment Funds (SIF), a flexible non-UCITS vehicle that is subject to lighter supervision by Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF). To date, more than 1,000 SIFs have been set up.
Luxembourg law provides a framework for so-called umbrella funds, with one or more individual compartments under a single legal structure. Each compartment invests in a different asset class.
Luxembourg funds are exempt from income tax and net wealth tax, and do not levy withholding tax on distributions unless the EU Savings Tax Directive applies. Funds are subject only to subscription tax of 0.01% to 0.05% of their net asset value, unless exempt under special conditions. Luxembourg has in
mainly subsidiaries of European banks, and is the world’s second-largest investment fund centre and largest global distribution centre for investment funds (75% of the world’s cross-border funds, distributed in at least three countries, are based in Luxembourg).
The main compartments of the financial sector today are the management and distribution of investment funds, private wealth management and the interbank market. More recently, life insurance and reinsurance industries have also seen strong growth.
particular abolished the subscription tax on Exchange Traded Funds (ETFs) and Microfinance Investment Funds. Funds qualify as taxable persons for VAT purposes; case-by-case analysis is needed to decide whether VAT registration is necessary.
Related services have grown along with the fund industry. Today, more than 70 depositary banks and approximately 200 management companies have registered with the CSSF. Auditors, law firms, tax advisors and other professionals specialised in the field of invest-ment funds are well established in Luxembourg and are constantly evolving to keep step with new products.
Luxembourg Financial Sector
Investment Funds in Luxembourg
V. focus on the luxembourg fund industry
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ALFI ALFI (Association of the Luxembourg Fund Industry) is the official representative body for the Luxembourg investment fund industry.
The association’s mission is to “lead industry efforts to make Luxembourg the most attractive international centre”. To that end, ALFI brings together the interests of over a thousand Luxembourg-domiciled investment funds and nearly 200 companies active in the Luxembourg fund industry. These represent a wide variety of service providers, including depositary banks, fund administrators, transfer agents, distribu-tors, law firms, consultants, tax advisers, auditors and accountants, specialist IT providers and communications agencies.ALFI recently launched a virtual Investor Centre to provide investors with basic information on investing, with particular reference to the investment fund sector. The Investor Centre offers information on a broad range of topics in areas such as the different types of investment available through funds and the rules and safeguards covering the industry. The Investor Centre is accessible via ALFI’s website www.alfi.lu
ALFI’s Mission Statement
Help members capitalise on industry trends ALFI’s numerous Technical Committees and Working Groups continuously analyse global industry developments as well as legal and regulatory changes in Luxembourg, in the EU and beyond, and the threats and opportunities these may constitute for the Luxembourg fund sector.
Shape regulation A modern and innovative legal and fiscal environment is of key importance to defend and improve the competitive position of Luxem-bourg as a centre for the domiciliation, adminis-tration and distribution of investment funds. Its close contacts with the regulatory authority, the government and the legislative body allow ALFI to help shape regulation by bringing valuable input when there is a need to adapt the regulatory framework, to adopt a new Euro-pean Directive or to create a specific regulatory framework for new products or services.
Encourage professionalism, integrity and quality Investor trust is key to successfully developing the collective investment business. ALFI therefore strives to encourage professional behaviour, quality products and services, and the integrity of all players involved by offering training courses designed for novices and experts, by developing codes of conduct, transparency and good corporate governance, and by supporting efforts to fight money laundering.
Promote the Luxembourg investment fund industry ALFI actively promotes the Luxembourg investment fund centre, its products and services by representing the sector in economic and financial missions organised by the Luxembourg government around the world and by taking active part in the principal meetings of the global fund industry.
1 Source: MicroRate, Aug. 09
25
Ranking of Major Fund Promoters in Luxembourg by Cross-Border Registrations
Cross-Border Funds in Luxembourg since 2002
# x-border registrations
Luxembourg Ireland Other number of true x-border funds
# x-border funds
Source: Lipper Hindsight, 2009
Source: Lipper Hindsight, 2009
Rank Promoter Domicile Countries of Sale
1 Franklin Templeton LU 50
2 HSBC Holdings LU 42
3 BlackRock LU 40
4 Schroder LU 38
5 BNP Paribas LU 33
6 Fil International LU 33
7 Société Générale LU 32
8 Barclays IE 30
9 JPMorgan Chase &Co LU 30
10 Invesco Ltd LU 29
11 Allianz Group LU 28
12 Deutsche Bank LU 28
13 Swiss & Global AM LU 28
14 UBS LU 28
15 Fortis Investments LU 27
16 Legg Mason IE 27
17 Pioneer Investments LU 26
18 BNY Mellon / WESTLB Mellon IE 25
19 Aberdeen Asset Management LU 24
20 Credit Agricole LU 24
21 Credit Suisse LU 24
22 ING GROEP LU 24
23 Henderson Group PLC LU 23
24 Lloyds TSB Group JE 23
25 Morgan Stanley LU 23
43,3
04 49,2
66 56,4
92
56,0
76
56,1
75
57,1
36
58,5
53
3,75
0 4,52
9
4,87
5
5,17
0 5,90
7 6,62
5 7,36
6
7,21
9
7,16
5
7,34
6
7,44
1
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2002 2003 2004 2005 2006 2007 2008 Q1-09 Q2-09 Q3-09 Q4-09
26,9
66
26,0
30
28,4
27
36,4
11
26
Authorisations by domicile
Cross-border fund groups 2003-2009
Source: Lipper Hindsight, 2009
Source: Lipper Hindsight, 2009
Market shares of promoters by country of origin at 31 December 2009
Sources: CSSF / ALFIothers
Situation in 2008
4.1%1.3%
2.1%2.5%
0.9%
12.9%
76.2%
Situation in 2009
VI. a great place to live and work
A prime location in the centre of Europe and a dedicated workforce that is multilingual and multicultural, with nearly 40% of the popula-tion born abroad, have enabled Luxembourg to win its place as a leading international financial centre despite its small size.
Hospitable and open to the world, Luxembourg enjoys a stable political and economic environment, a vibrant mix of
cultures from around the world and high standards of living.
For all of these reasons and more, we invite you to discover Luxembourg and hope to share with you, your business and your family all the attractions that our uniquely dynamic country has to offer. We look forward to seeing you soon.
alfi | association of the luxembourg fund industry
B.P. 206L - 2012 Luxembourg
Tel: +352 22 30 26 - 1Fax: +352 22 30 93
October 2010