Financial Centre: a leading cross-border financial centre with a unique offering

A solid and stable financial hub

A key characteristics of Luxembourg's financial sector is soundness which draws on the Grand Duchy's well-established political, economic, and social stability. Luxembourg's debt-to-GDP ratio stood at just 24% at the end of 2022 compared to the EU average of 86.4%. The country has consistently been rewarded for the prudent and responsible management of public finance and is one of few countries in the world with a AAA credit rating from all major ratings agencies.

A sound legal framework primarily based on EU legislation is also a key characteristic of Luxembourg, with the country's strength as a financial centre resting on key legal pillars. These include a first-mover advantage from the efficient implementation of EU regulations and directives, a sophisticated corporate law, and the application of the highest standards in terms of financial supervision and investor protection.

 A true focus on investors' needs, with expertise spanning the entire financial services value chain, including cross-border fund distribution, sustainable finance, wealth management, insurance and reinsurance, payments, and leading capital markets infrastructure make Luxembourg the ideal location for international financial firms looking to do business globally from an EU hub. 

Key activities

Major international banks serve European and global cross-border clients from Luxembourg, with a number of activities taking place in the Grand Duchy, including private banking and wealth management which have clear synergies with asset management and insurance activities undertaken in the country. Corporate finance services are a mainstay of Luxembourg's financial centre, building on the long-standing expertise that has developed in the country to serve companies operating internationally and facilitating foreign trade.

Luxembourg has been a first mover in the internationalisation of the asset management industry over the last 40 years, which has led to the country becoming the world's leading cross-border asset management hub and the second largest fund hub globally after the United States. The credibility that Luxembourg funds have established goes far beyond the EU and the country brings everything together under one roof – an experienced regulator, international oriented management companies, highly skilled service providers and leading expertise. Luxembourg has become a reference point for sustainable finance and is the world's leading sustainable investment fund hub.

Luxembourg's capital markets environment offers highly sophisticated infrastructure; from listing and trading, to clearing and settlement. The Luxembourg Stock Exchange is a global specialist in the listing of international securities and has helped companies, institutions and governments access international capital markets for over 50 years. Furthermore, securitisation transactions represent a critical component of Luxembourg capital markets, with transactions using a variety of asset types as collateral. The country has long been a pioneer in the field of capital markets, and remains so today, with a blockchain friendly capital markets legislation that has attracted leading banks and supranational institutions.

The Grand Duchy has leveraged its cross-border expertise to act as a hub for foreign insurance companies looking to provide their services across the EU. While traditionally focused on life insurance and reinsurance, post-Brexit the country has increasingly taken on an important role has a major European hub for non-life undertakings.

Key stakeholders

These partners will provide you with more information on the financial centre:

• Luxembourg for finance is the first point of contact for any interested parties. Dedicated to the development of the Grand Duchy's financial centre, few others can provide as much insight as LFF.
• The Luxembourg Stock Exchange is the European leader in international securities listings, with over 39,000 securities in over 60 currencies from issuers from over 100 countries being traded here. It is also the world's biggest trading hub for green bonds.
• LuxFlag, an independent non-profit, manages the eponymous label that is awarded to investment vehicles that invest in the Responsible Investment sector.
• The Luxembourg House of Financial Technology (LHoFT) is dedicated to Fintech innovation. It serves as an incubator for start-ups and an innovation-fostering hub bringing together stakeholders from Luxembourg's thriving financial industries and the ICT sector, renowned research institutes, investors and public authorities.