Luxembourg funds woo UAE investors
Luxembourg, the second- largest investment fund centre after the US and an important private banking centre in the Europe, is trying to attract fund managers from the UAE to invest in registered funds there, people associated with the matter told Emirates Business.
As a part of the initiatives to attract investments from the UAE into the Luxembourg-registered investment funds, the Crown Prince of Luxembourg Prince Guillaume will visit the UAE on January 12.
Officials at Loyens & Loeff, a law firm that is sponsoring the events associated with the visit, said the prince will be accompanied by Luxembourg's Finance Minister Luc Frieden.
The visit comes close on the heels of a tax treaty becoming effective between the two countries. "The visit comes as a part of the efforts to attract the UAE fund managers and initiators to use Luxembourg -registered investment funds," said Stijn Janssen, Tax Advisor with Loyens & Loeff.
Prince Guillaume will also visit Bahrain.
While Bahrain already has about 600 Luxembourg-registered investment funds, the number is much lesser in the UAE. "We want more Luxembourg-registered funds to be launched in the UAE," Janssen said. He added that 10 Luxembourg-registered funds have been in launched in the country in the past one year.
"Four of these are Shariah-compliant funds," said Valerie Mantot Groene, Attorney at Law with Loyens & Loeff. These funds have been launched by the UAE-based financial institutions and are investing within the UAE and the GCC, Groene said. About 15 Luxembourg-registered funds have been launched in the UAE in the past two years, she said.
The UAE and Luxembourg have signed a tax treaty to avoid double taxation of companies. The treaty came into effect on January 1. The two countries have also signed an MoU to allow funds registered in one country to operate in the other.
"A Luxembourg-registered fund can operate from anywhere. However, it comes under the regulations of Luxembourg financial supervisory authority — the CSSF," Janssen said.
Prince Guillaume will address a seminar at the DIFC and meet Governor Humaid Al Tayer. Trade between the UAE and Luxembourg stood at Dh57 million in 2008 but is expected to rise much higher once the long-pending FTA between the UAE and European Union is signed. Luxembourg is Europe's leading centre for reinsurance companies. Of late, it has also been attracting several information technology companies.
This is the second high- profile visit from Luxembourg in recent months. Jeannot Krecke, Luxembourg's Minister of Economy and Foreign Trade, met UAE's Minister of Foreign Trade Sheikha Lubna bint Khalid Al Qasimi two months earlier.
Sheikha Lubna invited businesses in Luxembourg to benefit from the opportunities and facilities offered by the UAE for investors. She added that it was important for companies from Luxembourg to take part in the exhibitions and commercial shows staged in the UAE as they offer marketing, promotion and networking opportunities in the region.
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