Island Of Calm On A Storm-Lashed Continent

Sandwiched between Belgium, France and Germany, Luxembourg has developed a reputation as a leading international financial centre, with its stable political system and strong economy proving fertile ground for financial industries such as investment funds, reinsurance and banking.

However, it has not been attractive to everyone, and Luxembourg has struggled to shake off its reputation as a tax haven.

To discuss the opportunities and issues law firms and their clients face when doing business in Luxembourg The Lawyer, in association with Luxembourg firm Wildgen, hosted its latest Briefings Live event on the subject of Luxembourg at Ironmongers' Hall in the City last week.

Chaired by The Lawyer's special reports and Europe editor Joanne Harris, the session kicked off with a simple question - why should investors come to Luxembourg?

Samia Rabia, Wildgen's head of investment funds and Islamic finance, joked that people should visit Luxembourg for the pleasant climate, clearly referring as much to finance as sunshine.

"I'm sure you will appreciate that in these uncertain times there are lots of investors who would come here because it is a stable country," Rabia said. "If you can't show investors a stable environment - that their money won't be withdrawn from them unduly - there's no point talking to them."

Rabia also pointed to the country's political stability, skilled workforce and strategic location.

"It's a gateway to the rest of Europe," she said of the country's central location and multilingual population. "There's a skilled workforce with the ability to speak other languages as well as English. In fact, most people speak three or four languages fluently - that's a big asset for investors."

And those investors seem pretty pleased with themselves, too.

"We've had a positive experience dealing with Luxembourg because they work with English law documents and there are minimal changes to shareholder agreements," said Graeme Bruce, a corporate partner at Dundas & Wilson who has set up structures in Luxembourg for clients.

He said that a minor inconvenience was the need to have documents signed off by a notary, adding: "If I was reincarnated I'd like to come back as a notary as they don't seem to do much, but that's a small price to pay for a pretty flexible location where business is done in English."

Tax credit

Luxembourg is also well set up from a tax perspective, according to the panellists. The country has signed double tax treaties with...