Seven major Chinese banks, including Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of Communications, China Merchants Bank, China Everbright Bank have chosen Luxembourg as their principal European domicile.
This is a strong testimony to Luxembourg’s role as the main node connecting Europe with the RMB market and Chinese financial actors with European countries. Setting up their European hubs in the Grand Duchy has enabled them to leverage the EU passport to branch out and accompany their corporate clients across the continent. The Chinese banks are also active in serving European corporations who want to invest into China by guiding them through the regulatory requirements as well as complexities of the Chinese market.
We want to be a bridge between China and Europe from a business, culture, communication, and social aspect. We want to support Luxembourg as an RMB financial centre.
The Grand Duchy is the global leading cross-border fund hub, supported by an innovative and longstanding ecosystem and the prime EU banking hub for corporate, custody and private banking. It is also the leading EU centre of expertise in the field of cross-border wealth management. Furthermore, financial actors have access to a vast market infrastructure of essential services: such as the Luxembourg Stock Exchange (LuxSE) with its globally leading capital markets system for international securities listings and post trade service providers such as Clearstream.
Bank of China:
the first Chinese bank to enter the European market
Bank of China opened its Luxembourg branch in 1979, as its first overseas branch after the creation of the People’s Republic of China. The Grand Duchy was chosen for several reasons: its openness to China in general and to BoC in particular, its suitable geographical location in the centre of Europe, its stable political and regulatory environment, as well as the country’s responsive regulatory regime.
BoC Luxembourg serves as the European hub for the group. While in the past half of BoC Luxembourg’s clients were based in China, today approximately 80 % of its clients are based outside China. As the first Chinese bank entering the European market, BoC Luxembourg branch started its business by accompanying Chinese corporations doing business with Europe.
BoC Luxembourg has three main business lines: corporate banking, financial markets, and personal banking. Furthermore, the bank has designated the Luxembourg HQ to be the regional centre for asset management, private banking, and custody business. As the regional fund centre of the bank, the Luxembourg branch launched its first UCITS fund which gives European investors unprecedented access to the third largest fixed income market in the world. Moreover, BoC Luxembourg is advising and supporting corporate and sovereign clients that wish to diversify their funding needs by issuing RMB denominated bonds listed in China.
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CONNECTING CHINA AND EUROPE
Seven major Chinese banks, including Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of Communications, China Merchants Bank, China Everbright Bank have chosen Luxembourg as their principal European domicile.
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INVESTMENT FUNDS
Luxembourg is the global hub for cross-border investments and a gateway for Chinese investment flows
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RMB DENOMINATED BONDS
As a result of the internationalisation of RMB, the Dim Sum Bond market has grown since its inception and the Luxembourg Stock Exchange (LuxSE) is a one of the leading exchanges for the listing and trading of these instruments
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CLEARING AND SETTLEMENT
Since 2013, the PBoC began to designate overseas subsidiaries of Chinese banks to act as offshore RMB clearing banks. In Luxembourg, ICBC Luxembourg Branch functions as the official RMB clearing bank.
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PAYMENTS
Alipay, originally a payment channel for the Alibaba e-commerce platform, and WeChat pay, growing out of a popular Chinese social messaging service, have emerged as giant providers of e-wallets in China.
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