Luxembourg’s Crown Prince Guillaume Tuesday attended the signing of a Memorandum of Understanding (MoU) between his country and the Dubai International Financial Center (DIFC).
Home of 249 regional and international banks, insurers and asset managers, the DIFC has decided to cooperate in the future with Luxembourg in various fields including market access, financial regulations and infrastructure, training, and industry development for firms located in the two jurisdictions, according to the MoU.
Joined at the signing ceremony by a senior finance delegation which is currently visiting the United Arab Emirates (UAE), Crown Prince Guillaume encouraged firms from Dubai to do business in Luxembourg.
“The world’s largest satellite operator company, SES Global, is based in Luxembourg and various Internet sales providers like Amazon, Skype and Ebay equally have chosen Luxembourg as their European headquarters,” he said in a speech addressing the DIFC Authority, led by DIFC governor Ahemd Humaid Al Tayer.
Al Tayer welcomed the MoU with Luxembourg. “Luxembourg’s uniqueness and strategic location in the center of Europe makes it a natural partner for the UAE which itself enjoys a key location in the Middle East,” he said.
He also stressed that the UAE, of which Dubai is considered the city of finance, has taken effective measures to tackle the financial crisis.
“Some of the major policy measures taken by the UAE included a guarantee of all deposits by the Central Bank, the setting up of a 50-billion-dirham (about 13.6 billion U.S. dollars) emergency liquidity facility, and the deposit of 70 billion dirhams in local banks by the government,” he said.
Luxembourg has a tradition as a financial center in Europe and is specialized on the investment funds industry in particular. With lower tax rates than in neighboring France and Germany, it attracts capital as well as residents from both countries, which are member states of the European Union (EU) as Luxembourg is.
The country, which has a total population of only half a million people, is the second largest investment fund center in the world and the Eurozone’s premier hub for private banking.
Its 148 banks contribute 38 percent to the country’s GDP. Some 3,450 investment funds are registered in the tiny state, overseeing around 2 trillion euros (about 2.9 trillion dollars) under management. However, banks’ cumulated balance sheet shrank by 19 percent in 2009 as a result of the global financial crisis.