Luxembourg welcomes 60 finance firms because of Brexit

Buildings in the Kirchberg quarter are seen behind people standing in roman ruins in the city of Luxembourg, Luxembourg. (Reuters)
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Updated 29 January 2020

Luxembourg welcomes 60 finance firms because of Brexit

  • Landlocked low-tax Luxembourg, a Grand Duchy in the heart of Europe, has a reputation for financial services
  • According to accountants KPMG, Luxembourg has welcomed 65 firms owing to Brexit, ahead of Ireland on 64

LUXEMBOURG: More than 60 financial firms have moved some operations to Luxembourg to insulate themselves from the effects of Brexit, a industry group said Wednesday.
As EU lawmakers voted in Brussels to confirm Britain’s departure from the bloc, public-private agency Luxembourg for Finance released its figures.
According to the group, 60 firms “have publicly announced the relocation of activities to Luxembourg due to Brexit,” and at least ten more will do so.
“Since the Brexit referendum in 2016, Luxembourg has seen a spike in interest from firms planning for their future EU and cross-border activities,” it said.
“A further Brexit outcome has been that Luxembourg law is increasingly being chosen by international institutions active in financial markets.”
The City of London is by all measures the biggest financial center in Europe, and is likely to remain powerful after the United Kingdom leaves the EU.
But the City’s ability to freely provide financial services within the remaining member states will depend on a future cross-Channel trade deal.
This will be negotiated during an 11-month transition period after Brexit, and some firms are already looking to move some or all of their business.
Landlocked low-tax Luxembourg, a Grand Duchy in the heart of Europe, has a reputation for financial services — and discreet bankers.
According to accountants KPMG, Luxembourg has welcomed 65 firms owing to Brexit, ahead of Ireland on 64 and the Netherlands and France on 30 each.
These companies include banks and their departments, insurers and stock brokers shifting operations from the City toward continental locations.
Luxembourg for Finance CEO Nicolas Mackel said the duchy would be “an EU hub for firms considering their post-Brexit plans.”


Oman’s sultan says government will work to reduce debt

Updated 25 min 25 sec ago

Oman’s sultan says government will work to reduce debt

DUBAI: Oman's Sultan Haitham bin Tariq al-Said said on Sunday the government would work to reduce public debt and restructure public institutions and companies to bolster the economy.
Haitham, in his second public speech since assuming power in January, said the government would create a national framework to tackle unemployment while addressing strained public finances.
"We will direct our financial resources in the best way that will guarantee reducing debt and increasing revenues," he said in the televised speech.
"We will also direct all government departments to adopt efficient governance that leads to a balanced, diversified and sustainable economy."
Rated junk by all three major credit rating agencies, Oman's debt to GDP ratio spiked to nearly 60% last year from around 15% in 2015, and could reach 70% by 2022, according to S&P Global Ratings.
The small oil producing country has relied heavily on debt to offset a widening deficit caused by lower crude prices. Also, the late Sultan Qaboos, who ruled Oman for nearly 50 years, held back on austerity measures.
The country has delayed introducing a 5% value added tax from 2019 to 2021, and economic diversification has been slow, with oil and gas accounting for over 70% of government revenues.
Last week, rating agency Fitch said Oman was budgeting for a higher deficit of 8.7% for 2020 despite its expectation of further asset-sale proceeds and some spending cuts.
"We are willing to take the necessary measures to restructure the state's administrative system and its legislation," Haitham said in his first speech since the mourning period for Qaboos ended, without elaborating.
He said there would be a full review of government companies to improve their business performance and competence.
Oman observers have said that if Haitham moves to decentralise power it would signal willingness to improve decision making. Like Qaboos, he holds the positions of finance minister and central bank chairman as well as premier, defence and foreign minister.