Doesn’t sound too great to be sure. I literally read how Luxembourg is a big hub for Special Purpose Vehicles (independent companies used in the issuance of CDOs and other asset backed securities) in my finance textbook. For tax purposes obviously. But Luxembourg is playing an important role in sustainable finance and has an established financial ecosystem. Don’t think it will be a quick downfall. Maybe some players will move away, but I think it will be a gradual adaptation. If the next governments aren’t blind to this it should be manageable. There’s a lot of skilled workers here, IT, space/satellite industry, crypto/blockchain making its way into the country… we’ll see
Honestly, I suspect it will end up having no effect on financial interests and a detrimental effect on small business. Goldman Sachs? No problem, we’ll put 3 guys in an office, and they can handle the paperwork to prove their own existence. Small business? Here’s the additional three forms you need to file quarterly to prove you’re creating economic value.
Luxembourg, for all of its wants to avoid letterbox companies and the like have added so much bureaucracy to business creation and management in the country that it’s difficult to start up or engage a new business that doesn’t hit the ground profitable — so that the _only_ ones who are likely to establish or re-establish here will be doing so for tax purposes.
I understand the motivation, I truly do, but the solution is to simplify to allow innovation, not add yet another office-of-mandatory-reporting to prevent bad actors. Just… tax them.
Could this stop the housing prices from climbing ever higher? Pretty please?
i was a little confused as the thumbnail showed a blue sky and thought “no it probably wont”
This is an European directive applicable for all members states, so not only Lux. Plus it doesn’t look that bad, except for a minority of companies. This is really targeting individuals setting up one “shell” company to avoid taxation. This kind of set up is fading down in Lux for the last 10years or so now.
The positive side is that we are seeing more individuals coming in Lux with different qualifications, not only accountants but now portfolio, risk manager,…
So Lux is changing but in the right direction, we are more looking like a place like London, Paris, Frankfort… (But not yet that their level).
What are some companies that might stay compared to leaving if this policy is effective?
Big 4 will definitely stay. They’ve got so much clout on this back office of a country.
Banking: between France and Luxembourg, lux has a smaller gov that can lobby for the EU, stand to have laws that still benefit banking and financial industry even if not tax. But I’m curious which ones might stay and go.
Tech: the big question.
Space: the lux laws are awesome for space exploration this industry will only boom unless it gets too big and geopolitics murders it but doubt.
You know our service industry is really bad. So many rich expats and this place is hella boring. What services would you like to see here in Lux?
9 comments
Doesn’t sound too great to be sure. I literally read how Luxembourg is a big hub for Special Purpose Vehicles (independent companies used in the issuance of CDOs and other asset backed securities) in my finance textbook. For tax purposes obviously. But Luxembourg is playing an important role in sustainable finance and has an established financial ecosystem. Don’t think it will be a quick downfall. Maybe some players will move away, but I think it will be a gradual adaptation. If the next governments aren’t blind to this it should be manageable. There’s a lot of skilled workers here, IT, space/satellite industry, crypto/blockchain making its way into the country… we’ll see
Honestly, I suspect it will end up having no effect on financial interests and a detrimental effect on small business. Goldman Sachs? No problem, we’ll put 3 guys in an office, and they can handle the paperwork to prove their own existence. Small business? Here’s the additional three forms you need to file quarterly to prove you’re creating economic value.
Luxembourg, for all of its wants to avoid letterbox companies and the like have added so much bureaucracy to business creation and management in the country that it’s difficult to start up or engage a new business that doesn’t hit the ground profitable — so that the _only_ ones who are likely to establish or re-establish here will be doing so for tax purposes.
I understand the motivation, I truly do, but the solution is to simplify to allow innovation, not add yet another office-of-mandatory-reporting to prevent bad actors. Just… tax them.
Could this stop the housing prices from climbing ever higher? Pretty please?
i was a little confused as the thumbnail showed a blue sky and thought “no it probably wont”
This is an European directive applicable for all members states, so not only Lux. Plus it doesn’t look that bad, except for a minority of companies. This is really targeting individuals setting up one “shell” company to avoid taxation. This kind of set up is fading down in Lux for the last 10years or so now.
The positive side is that we are seeing more individuals coming in Lux with different qualifications, not only accountants but now portfolio, risk manager,…
So Lux is changing but in the right direction, we are more looking like a place like London, Paris, Frankfort… (But not yet that their level).
What are some companies that might stay compared to leaving if this policy is effective?
Big 4 will definitely stay. They’ve got so much clout on this back office of a country.
Banking: between France and Luxembourg, lux has a smaller gov that can lobby for the EU, stand to have laws that still benefit banking and financial industry even if not tax. But I’m curious which ones might stay and go.
Tech: the big question.
Space: the lux laws are awesome for space exploration this industry will only boom unless it gets too big and geopolitics murders it but doubt.
You know our service industry is really bad. So many rich expats and this place is hella boring. What services would you like to see here in Lux?
Yes.
Yes
It won’t have any impact.