Luxembourg’s Ministry of Finance, in an interview with Paperjam, set out measures already implemented and further work intended to reinforce the attractiveness and competitiveness of the Luxembourg financial centre, with a focus on tax incentives, digital finance and the enabling legal framework. The minister cited a one percentage point cut in corporate income tax, an exemption of all exchange-traded funds from the subscription tax, a revised expatriate tax regime under which 50% of the first EUR 400,000 of annual compensation is exempt, and changes to the profit-sharing bonus. He also referred to a revised tax regime for carried interest and to ongoing work on the regime for investments in startups, including fintechs. In outlining the centre’s “three pillars”, he highlighted the fund industry’s more than 7,600bn of assets under management and the growth of alternative funds, including European long-term investment funds, with two-thirds of EU ELTIFs domiciled in Luxembourg. On digital finance, he pointed to legislative needs around Markets in Crypto-assets, blockchain, tokenisation and neobanks, including careful assessment of deposit-guarantee risks; he noted that Coinbase has been licensed in Luxembourg under MiCA and that other applications are being processed. The interview also referenced Luxembourg’s technology-neutral blockchain framework, the launch of a digital treasury certificate, and the sovereign wealth fund opening its investment strategy to 1% for Bitcoins. Looking ahead, the minister signalled openness to greater public-private investment in cybersecurity, including public funding for private projects that may be dual-use. He also indicated Luxembourg’s willingness to implement initiatives proposed in the Draghi and Letta reports to expand the role of private equity in European financing, and to consider legislative adaptations that would facilitate financing for green hydrogen and promote “blue finance” linked to water-related investments.

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