How to invest in Luxembourg: a guide for large estates

Luxembourg combines political, regulatory and fiscal stability with a cutting-edge financial industry. It is one of the few countries in the world with an AAA credit rating and the world's second centre by volume of assets held in investment funds.

A founding member of the European Union and home to several of its institutions, the country has built a strong culture of investor protection and first-class financial supervision.

Luxembourg private banking offers large estates a single point of contact — the private banker — to manage their entire financial wealth, with confidentiality and multi-currency operations (euros, dollars and pounds).

Its usual advantages include custody and geographic diversification of assets, access to international investment vehicles and the ability to structure wealth with legal certainty.

• International funds (UCITS): the range of funds domiciled in Luxembourg is one of the largest in the world.
• SICAVs and sub-funds: collective investment structures for substantial estates.
• Unit Linked: life-investment insurance with wealth planning advantages.
• Discretionary management: portfolios managed under a mandate and risk profile.
• Fixed income, equities and financing such as Lombard credit.

Taxation depends on the investor's country of tax residence, so there is no single answer. Spanish tax residents must report foreign assets above legal thresholds and pay tax on income under the applicable rules; investors from the Middle East, Latin America or the rest of Europe are taxed according to their own jurisdiction and the applicable double taxation treaties.

In all cases, specific tax advice is essential before making decisions.

The reference amount to open a private banking relationship in Luxembourg is usually from €500,000. Some bespoke management or advisory services require higher amounts. The first step is to analyse your wealth and objectives to assess whether this centre fits you.