Luxembourg

Housing markets in major cities across the world face a “prolonged stagnation” in purchase prices and a price correction. House owners and real estate investors should not expect the market to trend sideways. It’s “game over” for housing markets, Swiss bank UBS writes in its latest Real Estate Bubble Report.

With a rise in interest rates, finance costs have increased while financial markets across the world have been rocked by geopolitical developments and severe declines in asset prices. 

Luxembourg is one of six countries that are most competitive in terms of taxes among the world’s 38 most developed economies, according to the latest International Tax Competitiveness Index. 

While this might seem to lend ammunition to those who criticise Luxembourg as a tax haven, the picture painted in the report is somewhat nuanced. For example, it also ranks fellow cross-border business hub Ireland as 35^th out of the 38 OECD member states.

Plans by Paris-based Caceis to take over RBC Investor Services’ European business are raising redundancy fears among the firm’s 900 or so Luxembourg-based staff members in Belval.

Growth in funds registered as Reserved Alternative Investment Funds, known as Raifs, in Luxembourg has increased considerably in the first half of this year , according to an analysis of data from the Luxembourg Business Registry by Investment Officer Luxembourg.

An innovative start-up in Luxembourg is looking to democratise housing markets by tokenising homes. Leveraging the blockchain, BlocHome lets its clients partially own the home they live in. On the part they do not own they pay rent. “The more you are owner, the less rent you have to pay.”

The 55 million euro high security, high value storage facility formerly known as the Luxembourg Freeport – now known officially as the High Security Hub (HSH) – was back in the headlines recently as auditor BDO Audit drew attention to what it termed  “significant uncertainties” about the firm’s ability to continue its business activities “on a going concern basis,” in its corporate audit report of HSH’s balance sheets, filed to the Luxembourg Business Register in mid-July.

Although its overall market share contracted slightly, Luxembourg last year held on to its number one spot among Europe’s top 10 investment hubs for both Ucits and Alternative Investment Funds, with a market share of 26.8 percent, compared to 27 percent that was reported for the previous year, according to the latest annual reported released by the Association for the Luxembourg Fund Industry, or Alfi. Ireland’s share of the pie increased to 18.6 percent last year from 18 percent reported for 2020. 

Luxembourg has frozen some 4.3 billion euro in Russian assets, mostly held in shares, bonds and bank accounts, as part of the international sanctions against Russia, the finance ministry said.

The Luxembourg Business Register, at the request of the finance ministry, so far has identified more than 90 persons and 1,100 legal entities registered in the Trade and Companies Register (RCS) for which there are details of persons included in the sanctions lists. 

Accompanying Luxembourg’s finance minister Yuriko Backes on her official visit to Stockholm, Luxembourg’s financial community this week sought to strengthen its financial ties with Sweden, considered a “natural partner” for the Grand Duchy. Backes also discussed plans to support the reconstruction of Ukraine with her Swedish counterpart.

Travelling back to Luxembourg, Backes said on Twitter that her visit had been “very productive.” Backes was accompanied by a Luxembourg for Finance delegation and several representatives of Luxembourg’s financial services sector.

If there is one economic lesson my father, a construction engineer, taught me, it’s that mortgage rates in Europe always follow what’s happening in the United States. When rates go up across the Atlantic, they’re bound to do the same in our part of the world. So when it comes to locking in a good mortgage rate, look west.