Luxembourg and Saudi Arabia
Riyadh, the Capital of Saudi Arabia, is the third stop of the Luxembourg financial sector road show. Speaking in front of 120 financial experts, Minister of Finance Luc Frieden said that Luxembourg had much to share with the Gulf Region. He also announced that the signing of a Double Tax Treaty between Saudi Arabia and Luxembourg is foreseen this summer. Crown prince Guillaume, in his speech, said that Luxembourg is often considered as a microcosm of Europe.
Luxembourg has half a million inhabitants, the Kingdom of Saudi Arabia more than 25 million, but the countries have something in common: a large foreign population. Prince Guillaume of Luxembourg underlined that his country is considered as a melting pot because of its 150 nationalities.
He went on to provide a historical flashback starting at the end of World War Two, when Luxembourg became a member of all the important international institutions including the United Nations, the International Monetary Fund and the World Bank. “They positioned Luxembourg at the forefront of European integration. Luxembourg is one of the six founding members of the European Union”, he added.
Thanks to its strategic location between the cultures of France and Germany, many internationally active companies have established their headquarters in Luxembourg. The crown prince cited SES Global, the world’s largest satellite operator and various internet sales providers such as Amazon, Skype and Ebay.
Despite the importance of the service sector, Luxembourg also maintains a diversified, strong and globally competitive industrial base which includes the automotive supply industry with Delphi, Goodyear and Guardian, and the chemical industry, with Dupont.Luxembourg is the domicile of the world’s largest steel producer, Arcelor Mittal and of one of the top ten cargo carriers in the world, Cargolux.
He concluded by saying that the financial centre was without any doubt the crown jewel of the Luxembourg service sector.
Minister of Finance Luc Frieden explained what he considered to be the principal asset of the financial centre: it is the only one in the euro zone which is truly international. “A lot of financial institutions that come to Luxembourg use Luxembourg as their gateway to the European market of 500 million people”.
“Today we are the number one for wealth management in the euro zone. We are also the number one for investment funds in Europe and second in the world behind the United States”.
He doesn’t beat about the bush when it comes to political priorities: “The government wants the financial sector to be the key pillar of our economy; therefore, a lot of attention is given to the further development of this sector”.
He adds that the financial centre is often referred to as the Switzerland of the European Union. “We have indeed a lot of common features with the financial services sector in Switzerland, but we are in the European Union and that is why a lot of international banks, including the Swiss banks, use Luxembourg as a hub to enter the European Market.”
On Thursday, the fourth and last stop of the Luxembourg financial sector road show will be Beirut, the capital of Lebanon. Luxembourg and its host have something in common: Luxembourg is considered as a gateway to Europe, the Lebanon as Europe’s gateway to the East and Asia’s gateway to the Western world. CW
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