Banking and financial services
It is well-know that banks, investment funds and other types of financial institutions are setting up offshore branches in order to service multinational corporations, to facilitate trade, and to provide investment management for high-net-worth individual customers.
Luxembourg have developed centres for particular types of financial service: thus several thousand investment funds are managed in Luxembourg.
In recent years, growing financial awareness has created strong demand for offshore financial services among a wider community of customers; this is especially true of offshore investment funds. Even so, offshore financial services have tended to remain the preserve of larger companies or of relatively wealthy and sophisticated individuals.
Offshore providers of financial services have strong competitive advantages and the unclogging of marketing channels may unleash a tidal wave of demand for their products. Here are some of the competitive advantages of financial e-commerce :
- Profits are kept in Luxembourg and are subject to a its corporation tax base calculation, allowing cheaper products
- Luxembourg jurisdictions are usually well-known in the world for its seriousness and confidentiality
- Financial products themselves can take advantage of a low-tax environment in order to deliver greater returns to customers
Assuming that the Commission de Surveillance du Secteur Financier deliverers a proper agreement on the financial institution applicant, the whole range of retail financial services can be provided from Luxembourg using the Internet. Services and products can include:
- Electronic banking including current and deposit account maintenance, paying bills, direct debits etc
- Offer and sale of stocks and shares, investment and mutual fund units, equity derivatives etc
- Foreign exchange services
- Offer, sale and maintenance of savings products including pension schemes
- Offer and sale of insurance products
- insurance industries.
