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Why Luxembourg
Luxembourg remains one of the most attractive securitisation hubs in Europe. Its competitiveness lies in its offering of a robust but at the same time flexible legal and tax framework, making Luxembourg often more attractive than other European countries. This has been strengthened by the modernisation of the Luxembourg Securitisation Law early 2022 which now also allows for active management of debt portfolios and the refinancing through loans.
In the different European statistics, Luxembourg usually ranks first or second with regards to the number of securitisation vehicles and transactions. We are optimistic that the securitisation market will further grow and that Luxembourg will keep its position as prime location for securitisation transactions in Europe.
One of the key advantages of Luxembourg is the concept of “compartments”, segregated parts of assets and liabilities within one entity. Contrary to other jurisdictions, in Luxembourg this segregation of assets between compartments is defined by law and we often observe structures with more than ten compartments, some even several hundred.
The Luxembourg Securitisation Law is an opt-in law and provides a wide definition for securitisation, namely any type of assets or risks can be securitised and refinanced by the issuance of financial instruments. This is significantly different to the definition of the European Securitisation Regulation which refers to the transfer of credit risk only and requires the refinancing to be split into multiple subordinated tranches. The Luxembourg Securitisation Law caters for this type of securitisation but also goes beyond.
Furthermore, there is no limitation on the investor basis, investments into a Luxembourg securitisation vehicle are open to all types of investors. A direct supervision by the Luxembourg regulator CSSF is only required when a continuous issue to the public occurs, which is not often the case.
All in all, Luxembourg securitisation vehicles are a very efficient tool for financing or creating investment opportunities at a reasonable cost and quick time-to-market.
Who we are?
Our PwC Luxembourg Securitisation Core Group consists of 16 Partners & Directors leading more than 80 Securitisation experts. Whatever your requirements, our dedicated audit, tax and consulting teams have the necessary experience to guide you through the realms of the Luxembourgish market as well as local and European regulations and will make achieving your goals their number one priority.
Assurance
Our global presence allows us to provide all audit and audit related services for special purpose entities used for securitisations and structured finance transactions, such as:
- Statutory and contractual audits
- Limited Reviews and agreed-upon procedures
- Audit related services, such as accounting advice and support on capital market transactions
In every case, the PwC audit and audit related service is underpinned by our deep industry knowledge, wide international experience, and global network of skilled professionals.
Tax
- Review of the existing securitisation structures from a corporate income tax (i.e. impact of the interest limitation rules) and VAT perspective to identify the areas of risk and propose remediation actions.
- Assisting clients to choose the most tax efficient securitisation structure among the different alternatives that are offered by the Luxembourg Securitisation Law of 22 March 2004.
- Provide tax compliance services like preparing and filing corporate tax returns for securitisation companies, FATCA and CRS reporting obligations, VAT registrations, preparing and filing VAT returns.
Advisory
Review of the existing securitisation structures from an eligibility perspective under the Securitisation Regulation and UCITS Directive
Assist Management Companies and AIFMs to implement procedures and processes when the funds they manage invest in securitisation structures
Assist on CSSF filings in relation to the amended Article 4 of the Securitisation Regulation
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Contact us
Xavier Balthazar
Advisory Partner, Asset Management, Regulatory & Compliance, PwC Luxembourg
Tel: +352 49 48 48 3299
Luc Petit
Tax Partner, Clients & Markets Hedge Funds Leader, PwC Luxembourg
Tel: +352 62133 31 48
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