The Luxembourg financial centre has expanded in the last 40 years to become an international hub for Private Banking and Asset Management. Servicing a wide range of private and corporate clients from all over the world, the country’s financial sector is recognised globally for its expertise and sophistication.
Adapting to the new regulatory and technology environment
In March 2013, the Luxembourg Parliament transposed into local law the European Directive on administrative cooperation the field of taxation. Also, the agreement on exchange of information with the USA in the context of FATCA is seen as a major step towards even more transparency. In the wake of these new developments, banks are gearing up to offer complex tax reporting services to international clients with cross-border interests. At the same time, they are embracing new technological developments - such as digital banking - which involve heavy investments in systems in order to deliver the information that clients really need.
European authorities continue to make progress towards establishing a Banking Union, which would see the European Central Bank directly supervise the most significant banks in the euro area and in other Member States deciding to join the union. Basel III, by means of the so-called CRD IV package, is going to introduce a whole set of new regulatory requirements for banks, including new liquidity rules. And the OECD’s BEPS1 initiative is looking to equip governments with the instruments to prevent companies from avoiding taxation in their home countries by exporting activities to foreign low- or no-tax jurisdictions.
Attracting international players
Luxembourg continuously attracts international players seeking to firmly establish their business in Europe while benefiting from the presence of a network of service providers.The family office status introduced in Luxembourg law in December 2012 is attracting European wealth advisors from neighbouring countries.