Luxembourg, a Top Financial Center Among the European Countries

Updated on Thursday 22nd June 2017

Luxembourg, a Top Financial Center Among the European Countries Image
Foreign businessmen interested in opening a hedge fund startup or another type of investment fund can set up their operations in Luxembourg. The country is known as being one of the leading jurisdictions for investment purposes and, in this sense, it is important to know that 75% of the income deriving from financial activities in this country is generated by international investors. 

Luxembourg, a top investment destination  

Luxembourg sets out as being the top investment jurisdiction at a European level. Investors interested in starting a hedge fund in Luxembourg can benefit from a solid legal framework and advantageous tax measures. At the moment, 27% of the investment funds available in Europe are registered in Luxembourg

At the level of 2016, the jurisdiction registered a total number of 4,144 investment funds and 14,595 fund units. These structures held a total of EUR 3.7 trillion in net assets. It is also important to know that in 2016, Luxembourg’s exports of financial services accounted for EUR 53 billion, being the top jurisdiction in the Euro region for this index. 

Financial sectors in Luxembourg 

Another relevant aspect that should be taken into consideration by the investors who are interested in how to start an investment fund in Luxembourg refers to the characteristics of the local financial market. 

The top financial sectors in Luxembourg are represented by the following domains: 

•    investment funds;
•    capital markets;
•    insurance;
•    banking

A characteristic of the Luxembourg’s financial market refers to its workforce, which provides a high level of expertise. Persons who are working in the above mentioned fields are mainly foreigners, as 81% of the workforce is represented by foreign employees (a part of them are citizens of the Luxembourg’s neighboring countries). 

Distribution of funds in Luxembourg 

The international distribution of funds incorporated in Luxembourg had a positive influence over the European economy. In 2016, a total of EUR 1,422 billion was invested in the Euro zone through investment vehicles. Other European states (members of the European Union) benefited from investments of EUR 358 billion. 

The top investment tools preferred by investors were the following: 

•    bonds
•    debt instruments;
•    equities

Businessmen are invited to contact our team of affiliates in Luxembourg for more details on the characteristics of the financial market. Our partners can help with further information on how to start a fund in this jurisdiction.