Adapt and survive
Luxembourg's cherished banking secrecy and tax advantages are coming under threat, but the Grand Duchy's lawyers are confident the regime has the flexibility to prosper within the new world order, writes Derek Bedlow
November 18, 2002 at 07:03 PM
5 minute read
With a population of little more than 400,000, Luxembourg must be the smallest jurisdiction to have attracted the attention of the major international firms. With the exception of Freshfields Bruckhaus Deringer, the UK's magic circle have all established a foothold in the Grand Duchy in recent years and top-tier Dutch practice Nauta Dutilh, a 'best friend' of the UK's Slaughter and May, opened its doors there this month.
A member of the European Union, Luxembourg is not a typical 'offshore' jurisdiction. However, its long-established 'holding' company entity and the more recent investment fund form (UCI) are both exempt from all taxes.
Luxembourg has a substantial international banking sector, thanks to its relatively relaxed regulatory regime, its 'holding' company legislation, the growth of the Euro markets and the existence of the Luxembourg Stock Exchange and Europe's biggest investment fund industry. During the year 2000 alone, assets in funds domiciled in Luxembourg increased by $70bn to $817.3bn.
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