During the past few years, activity levels in Luxembourg have been reaching record highs. Most of the world’s leading financial institutions now have offices in the Grand Duchy and domestic law firms have been expanding to meet the demands of the increasing number of investment funds residing in the country. Luxembourg is now at a point where, not only is it the key domicile for European investment funds but also, a large majority of the world’s international transactions are being structured through Luxembourg investment vehicles. So why has this small country of only 450,000 inhabitants spread across a mere 1,000 square miles been attracting so much attention recently?
In many ways, Luxembourg’s recent growth in the international marketplace is linked to a corresponding upturn in the investment fund and private equity markets and, specifically, the measures the country has taken to accommodate each of these areas. Also, with a surge in investment into alternative asset classes such as real estate, we are now witnessing more and more funds being introduced for these areas together with legislation being adapted to cater for this growth – resulting in a greater number of companies turning to Luxembourg for its holding and financing structures.
