The Advantages of Opening an Investment Fund in LuxembourgUpdated on Friday 10th June 2016
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Foreign businessmen who want to find a suitable location for an investment fund are advised to choose Luxembourg, as it is one of the most prestigious states in this sense. Luxembourg provides a solid legislation regulating the fund activities and it offers a set of incentives, appealing to both local and foreign persons. Entrepreneurs who want to receive more details on the investment market available in Luxembourg can address to our team of experts.
Luxembourg, the most representative fund center in Europe
Luxembourg is, at the moment, the most representative center for fund domiciliation in the Eurozone region. Its development started in 1988, when the local government imposed the UCITS Directive. The UCITS (Undertakings for Collective Investments in Transferable Securities) Directive is prescribing the creation of a single investment fund market, available within the European market, which offers a high level of security to the investor.
In 2015, the Global Financial Centers Index (GFCI) revealed that Luxembourg is the first financial leading center in the Eurozone and the third in terms of competitiveness in the European Union; our team of financial consultants can present further details on the GFCI study.
Taxation policies for investment funds in Luxembourg
UCI (Undertakings for Collective Investments) are required to pay an annual subscription tax representing 0,05% of the net asset values of the fund. However, the following types of funds do not have to pay the tax:
• special institutional money markets funds;
• pension funds;
• UCI in the field of microfinance.
It is important to know that foreign investors opening an UCI in Luxembourg are not required to pay the income tax.
At the same time, foreign investors are not subjected to paying the withholding tax on dividends or interest; they also do not have to subscribe for capital gains tax.
Banking and financing in Luxembourg
Luxembourg is a recommended location for fund domiciliation because one of its main sectors is represented by the financial services. Financial sector is comprised of private banking and fund administration, which falls under the supervision of the Commission de Surveillance du Secteur Financier, the main body regulating most of the financial activity in Luxembourg, which can refer to credit institutions, investment funds, payment institutions and other.
Persons interested in receiving more information on the advantages of establishing an investment fund in Luxembourg are invited to contact our team of financial representatives for consultations on this matter.