Luxembourg and Switzerland : 90% partners, 10% competitors

Luxembourg for Finance hosted two seminars in Switzerland this week aimed at strengthening strategic co-operation between the two countries. More than 450 participants in total, mostly bankers and wealth managers, took part in the events in Geneva and Zurich.

In his opening speech, Pierre Gramegna, Luxembourg Finance Minister said: “Luxembourg and Switzerland are 90% partners and 10% competitors”. Luxembourg and Switzerland are home to three of Europe’s leading international financial centres and are more complementary than ever before. Not only is Luxembourg a gateway for Swiss banks to access the European Union financial services market, but it is also well-positioned to act as a European hub for Swiss banks to serve clients’ needs in wealth management, capital markets, treasury and other financial functions. Moreover, Luxembourg and Switzerland have a similar international approach and outward perspective on financial services and both countries strive to establish a global level playing field in terms of regulation.

Out of 144 banks in Luxembourg, a dozen are currently Swiss, representing 5.5% of the country’s total banking assets. Similar to banks from other countries like Germany, Swiss banks have a growing number of services in Luxembourg and are set to increase their workforce in the Grand Duchy. Luxembourg is a renowned hub for European wealth management and an ideal location to regroup operations of foreign branches and rep offices in Europe.

In addition, Luxembourg’s comprehensive ecosystem, unrivalled cross-border financial services expertise and openness towards innovation, make it an essential partner to Switzerland in the European Union. (U)HNWI’s value Luxembourg’s toolbox with its range of investment vehicles, life insurance products as well as the quality of Luxembourg financial professionals, who are able to provide advice on complex international structuring matters and fully compliant solutions in multiple jurisdictions.

In terms of investment funds, 65% of foreign funds marketed in Switzerland are from Luxembourg. Swiss fund initiators stood for 472 billion EUR in 2016 representing a 14% market share.

Luxembourg is equally well-positioned to serve corporate clients. Large Swiss banks tap into the pool of European institutional investors by having access to the Luxembourg Stock Exchange. To date, there are 1,865 listings of Swiss origin on the Luxembourg stock exchange (Bdl Market and Euro MTF combined). Swiss companies use the Luxembourg Stock Exchange to list bonds in multiple currencies and when they raise capital in euros.