In an increasingly volatile environment, Luxembourg has established itself as a stable and strategic hub for global operations. By building a reliable foundation based on fiscal prudence, strong governance, and regulatory clarity, Luxembourg offers financial institutions and their clients a predictable and resilient environment for cross-border operations.
Luxembourg today already embodies the principles of the Savings and Investment Union (SIU), living and breathing cross-border finance every day. Unlike centres focused on domestic markets, Luxembourg’s unique expertise in serving the entire EU positions it as a blueprint for what a fully unified European capital market could look like. With a robust and flexible securitisation framework, comprehensive capital markets infrastructure, its role as the leading global investment fund centre and Europe’s dominant centre for private asset funds, Luxembourg demonstrates that the foundations for deeper European financial integration already exist. The financial centre connects global capital to European opportunities while providing European investors with efficient tools to diversify internationally, solidifying Luxembourg’s role as Europe’s bridge to global markets.
Moreover, Luxembourg champions openness and international engagement in an era where protectionism threatens to close borders. Financial institutions from around the globe rely on Luxembourg’s ecosystem, which has evolved into a hub for private assets, corporate finance, and banking innovation.
By enabling the growth of alternative funds, digital assets, and tokenised investments, Luxembourg positions itself as a forward-looking financial centre, driven by innovation and a commitment to enhancing the EU’s global competitiveness.
As Europe strives to increase its investment potential, expand sources of funding for its companies and enhance its appeal to global capital, Luxembourg provides not just an operational model but a vision for the future of European finance. By fostering openness, resilience, and connectivity, Luxembourg exemplifies how a financial system can drive growth while navigating the complexities of an interconnected world.
By 2030, Luxembourg is committed to shaping finance as a transformative force, helping a more competitive EU achieve sustainable growth, foster innovation, and build resilience. This ambition is grounded in Luxembourg’s ability to bridge global capital with European opportunities, leveraging its role as an international financial hub to address Europe’s most pressing economic and social challenges.
Enabler of a Savings and Investment Union
Our Ambitions
Be a key enabler in developing a Savings and Investment Union in the EU, providing access to funding for companies, SMEs and startups across Member States and access to best-in-class investment and savings products for Europe’s citizens.
Connect the EU with global capital and support economic growth, building on Luxembourg’s investment and fund distribution expertise, a predictable tax environment and robust regulation and supervision.
Actively contribute to the rebirth of securitisation in Europe via Luxembourg’s forward-looking and standard-setting securitisation law.
Leverage Luxembourg’s capital markets infrastructure, including the Luxembourg Stock Exchange and Clearstream, and its advanced legal framework to support the development of pan-European capital markets and increase financing sources for European companies.
As a key enabler of the SIU, Luxembourg embodies its principles in practice. For Europe to maintain its competitive edge, openness to international capital is essential. Luxembourg’s well-regulated financial ecosystem provides a reliable gateway for global investors seeking to contribute to Europe’s infrastructure, green technologies, and digital transformation. This openness is underscored by Luxembourg’s role as Europe’s largest investment fund centre, managing nearly €7.2 trillion in assets in mutual funds and AIFs. Its proactive regulatory framework, fully integrated within the wider EU regulatory environment, offers investors a stable entry point for deploying funds across sectors vital to Europe’s economic future.
While most financial centres in Europe have a strong domestic focus, Luxembourg’s expertise and infrastructure exemplify how a unified European market can thrive by connecting global capital to local opportunities and enabling seamless cross-border investment flows. As the most international financial centre in the EU and a global leader ranking third after the US and the UK (see Figure 4), Luxembourg already serves as a practical blueprint for the SIU.
Assets in mutual funds and AIFs in Luxembourg: (End November 2024)
Top Financial Centres based on International Activity:
Luxembourg’s multilingual workforce and international expertise add to its appeal for global investors, ensuring smooth cross-border transactions and client engagement. Much of Luxembourg’s workforce speaks multiple languages, facilitating seamless, effective communication across borders. English has become the default language in Luxembourg’s financial centre, further enhancing its ability to serve a diverse international clientele. This ease of doing business supports Luxembourg’s ambition to function as a bridge to global capital, providing the structures that international investors need to enter European markets.
The country’s competitive tax landscape, coupled with an extensive network of double-taxation treaties with over 80 countries, reduces tax barriers and promotes efficient capital deployment. This helps to ensure that international capital is readily available to support projects across strategic areas such as renewable energy, urban development, and advanced technology. Luxembourg’s political stability and commitment to robust regulatory institutions further enhance its attractiveness, offering a reliable foundation for long-term investment in the EU. As part of its role within the SIU framework, Luxembourg’s financial centre exemplifies how the EU can unlock untapped savings and channel them into productive investments, enabling growth across Europe’s Single Market.
Luxembourg aims to deepen its role as Europe’s gateway to global capital, supporting a cohesive Single Market that thrives through international partnerships. Its ambition is clear: to be a gateway for capital, both from outside and within the EU, that empowers Europe to achieve its strategic objectives, strengthening a unified, open EU market that is positioned to lead in the global economy. This ambition aligns with the SIU’s goal of fostering greater capital mobility and connecting savers with investors across the EU, ensuring that Europe’s capital is deployed efficiently to drive sustainable and inclusive growth.
Luxembourg’s prominence in the Eurobond market further underscores its role as a vital gateway for global capital. As one of the largest debt markets in the world, the Eurobond market, valued at over EUR 13.2 trillion, relies heavily on the infrastructure provided by Luxembourg’s financial centre.
Home of the Eurobond market since 1963, when it listed the world’s first Eurobond, the Luxembourg Stock Exchange has been pivotal in facilitating international bond issuance, offering a trusted platform for issuers from over 130 countries seeking access to diverse global investors. Clearstream, one of the leading International Central Securities Depositories, plays an essential role in the post-trade process, ensuring seamless settlement and custody of these instruments, and playing a crucial role in collateral management. By combining efficient issuance through LuxSE with secure and transparent post-trade operations via Clearstream, Luxembourg has established itself as the backbone of the Eurobond market. This unique combination of infrastructure and expertise reinforces Luxembourg’s standing as the key enabler of cross-border capital flows, advancing Europe’s ambitions for integrated and accessible financial markets.
Building on Luxembourg’s well-established securitisation framework is crucial for addressing Europe’s funding needs and reigniting the EU’s securitisation markets, both of which are priorities highlighted by the Draghi and Letta reports. Securitisation is essential for freeing up bank balance sheets, enabling them to finance more projects while diversifying sources of funding for businesses across Europe. Luxembourg’s expertise in structuring and managing securitisation vehicles positions it as a key player in revitalising this market. The flexibility and efficiency of Luxembourg’s securitisation tools, combined with its robust regulatory framework, provide the ideal foundation for scaling up EU-wide securitisation. By facilitating cross-border issuance and creating pathways for capital to flow more freely, such as connecting international investors to European securitisation markets and enabling European issuers to access global capital, Luxembourg can help ensure that securitisation once again becomes a dynamic enabler of European growth, driving investments into critical sectors like infrastructure, green technologies, and SMEs. With its pioneering law of 2004, Luxembourg clearly has a head start and can build on two decades of experience to help re-dynamize European capital markets.
Luxembourg’s financial centre exemplifies how the EU can unlock untapped savings and channel them into productive investments, enabling growth across Europe’s Single Market.
A cornerstone of Luxembourg’s role in intra-EU investments is passporting rights, which allow Luxembourg-domiciled financial products and services, such as investment funds, banking services, and insurance offerings, to be accessible throughout the EU. This passporting capability is key to simplifying the distribution of funds and financial services across Europe’s borders, promoting a truly integrated market. 26% of Europe’s UCITS and AIFs are domiciled in Luxembourg, a testament to the country’s indispensable role in connecting European investors and businesses with opportunities across member states. Importantly, Luxembourg has turned UCITS into one the EU’s most successful export products. Luxembourg UCITS funds are today sold in more than 80 markets globally and exemplify the potential of the SIU by offering investors globally recognised and trusted investment solutions. Over the past decades, Luxembourg has thus become a global flag-bearer for EU financial products and services. A role that the country is committed to continue as part of the EU’s efforts to increase its global competitiveness.
The presence of the European Investment Bank (EIB) and its subsidiary, the European Investment Fund (EIF), in Luxembourg significantly bolsters the country’s capacity as a financial facilitator of investments within the EU. As the EU’s financing arm, the EIB funds large-scale, cross-border projects essential to Europe’s cohesion, infrastructure, and competitiveness, committing €75.1 billion in 2023 alone to initiatives in infrastructure, climate action, and social development. The EIF complements this by focusing on Europe’s SMEs, startups, and innovation-driven enterprises through venture capital, guarantees, and microfinance, mobilising expected investments of €134.6bn in 2023 and supporting nearly 350,000 SMEs.
Together, the EIB and EIF channel significant resources into the EU’s priority sectors, with Luxembourg’s financial centre providing the regulatory expertise, fund structures, and support services that help deploy this capital efficiently across borders. Luxembourg’s alignment with these institutions underscores its commitment to the EU’s strategic objectives, reinforcing its role as a central facilitator of capital flows that advance Europe’s Single Market and competitiveness on the global stage. These institutions further amplify Luxembourg’s alignment with the SIU’s objectives, ensuring that capital flows efficiently to where it is needed most, supporting both Europe’s long-term growth and its strategic priorities.
Luxembourg’s financial centre aims to further enhance its role as the EU’s enabler of cross-border investments. By strengthening the structures and services that facilitate capital flows across the Single Market, Luxembourg ensures that institutional and retail investors and businesses within the EU have seamless access to the financial resources they need to thrive. Luxembourg’s commitment to cross-border investment efficiency is vital in supporting Europe’s ambitions for a unified, resilient economy capable of adapting to the demands of an interconnected world. As a true cross-border financial centre and thus a fully operational blueprint of what the SIU aims to achieve, Luxembourg continues to lead the way, demonstrating how openness, regulatory expertise, and global connectivity can strengthen Europe’s financial system and drive its competitiveness on the global stage.
Facilitating Long-Term Investment
Our Ambitions
Expand Luxembourg’s leadership as the go-to jurisdiction for European Long-Term Investment funds (ELTIF), notably to help mobilise investments in infrastructure and the digital and sustainable transition.
Help address Europe’s demographic challenges by continuing to develop Luxembourg’s long-standing expertise as a fund and insurance hub and its toolbox of highly regulated investment fund products to serve the needs of savers and pension funds.
Leverage Luxembourg’s cross-border expertise to deliver better results for Pan European Pension fund products.
Long-term investments are critical to Europe’s ability to achieve sustainable growth and competitiveness, driving the development of infrastructure, innovation, and strategic industries. Luxembourg has established itself as a cornerstone of these efforts, offering a sophisticated financial ecosystem that facilitates the efficient deployment of capital across borders, enabling institutional investors and multinational corporations to engage in high-impact projects across the EU. By addressing Europe’s evolving investment needs, Luxembourg plays an essential role in supporting economic transformation and resilience within the Single Market.
Luxembourg’s expertise in European Long-Term Investment Funds (ELTIFs) has positioned it as a leader in facilitating investment flows to strategic EU projects. Luxembourg holds 67% of the ELTIF market share (see Figure 5), a dominance that rises to close to 90% when purely domestic ELTIFs are excluded, underscoring its central role in cross-border long-term investments.
Luxembourg's ELTIF market share:
Luxembourg’s well-established UCI Part II funds complement the renewed ELTIF framework by offering fund managers flexibility and alignment with investor needs, ensuring effective participation in this evolving market. By establishing a highly developed regulatory environment for ELTIFs, Luxembourg provides investors with compliant and effective means of contributing to Europe’s long-term objectives. This framework will be pivotal in directing capital towards essential projects, fostering sustainable economic growth across member states.
Cumulative ELTIF Launches by Country of Domicile:
Source: ESMA
In addition to ELTIFs, Luxembourg has developed a strong pension fund framework that supports the long-term management of retirement assets across the EU. The country’s regulatory standards are aligned with pan-European norms, ensuring that pension funds domiciled in Luxembourg can serve cross-border retirement plans effectively. Luxembourg’s prominence in cross-border pension funds is particularly attractive to multinational corporations looking to manage employee retirement assets within a unified regulatory framework. These funds, designed to integrate diverse assets such as equities, bonds, and alternatives, enable institutional investors to build resilient, growth-oriented portfolios that are essential for meeting Europe’s pension needs.
Pension systems across the EU exhibit significant fragmentation, with varying structures, target demographics, and investment strategies. Statutory pensions remain the primary source of retirement income for most EU citizens, yet only 23% participate in occupational pension schemes, and a mere 19% own personal pension products. This disparity underscores the necessity for standardised, cross-border retirement solutions like the Pan-European Personal Pension Product (PEPP). Luxembourg's alignment with the PEPP initiative highlights its commitment to supporting such products, enabling EU citizens to maintain cohesive savings strategies across member states and bolstering financial security throughout the Union.
The Letta and Draghi reports rightly underline the need to go further and boost second and third pillar pensions. Fortunately, there is inspiration to be found here in successful existing models, notably investment accounts such as Japan’s NISA scheme.
Leveraging existing frameworks, notably UCITS can facilitate the transition from savings to investments without the need to reinvent the wheel. Pension funds and other institutional investors, characterised by long-term investment horizons, are also increasingly allocating resources to alternative assets to enhance yields and stimulate growth in savings.
Luxembourg’s sophisticated fund structures, such as SICARs (Investment Companies in Risk Capital) and RAIFs (Reserved Alternative Investment Funds), are instrumental in facilitating long-term investments in infrastructure. These vehicles make it easier for institutional investors, sovereign funds, and other large stakeholders to deploy capital into complex, high-impact projects across the EU. Luxembourg’s legal and regulatory environment for these specialised vehicles simplifies the process for investors to engage in long-term infrastructure projects, from transportation and energy to urban development, supporting Europe’s economic transformation.
Looking forward, Luxembourg’s ambition is to reinforce its status as the EU’s primary centre for long-term investments, continuously adapting its financial products and regulatory environment to align with the evolving needs of Europe’s economic landscape and demographic challenges. A key differentiator for Luxembourg lies in its ability to remain nimble and responsive, focusing on anticipating market trends and creating tools and products that meet evolving demands. Guided by a European rather than a domestic perspective, Luxembourg acts in the best interests of the Single Market as a whole. By fostering partnerships between private and public sectors and modernising its financial product offerings, Luxembourg will ensure that long-term investments play a central role in Europe’s sustainable and competitive future, supporting a resilient economy that can meet the demands of a dynamic global market.
Paving the Way for Private Assets in Europe
Our Ambitions
Consolidate Luxembourg’s position as the premier hub for private assets in Europe, while expanding its influence globally as the jurisdiction of choice for alternative fund managers seeking access to European and international investors.
Broaden the investor base for alternative funds, including institutional, HNWI, and retail investors, by leveraging Luxembourg’s unique and flexible toolbox of investment vehicles and leadership in ELTIFs, thereby supporting the democratisation of private markets.
Luxembourg’s position as Europe’s premier hub for private assets significantly bolsters the EU’s competitiveness by attracting substantial private capital flows into key sectors. As the EU increasingly relies on private capital for sustainable growth, Luxembourg has become the leading domicile for alternative assets across Europe, supporting asset classes that drive economic development and innovation.
Luxembourg has solidified its position as Europe's premier hub for private assets, significantly enhancing the EU's competitiveness by attracting substantial private capital into key sectors. The country's market share in Europe's alternative investment funds has experienced remarkable growth, rising from just 8% in 2011 to 57% in 2022. This expansion spans a broad range of asset classes, including private equity, real estate, infrastructure, and private debt funds (see Figure 6).
Notably, among European-managed private capital funds that commenced investments in 2024, more than half were domiciled in Luxembourg, underscoring its dominance in the sector. This expansion emphasises Luxembourg’s role as a primary destination for private asset funds within the EU. The country’s ability to facilitate capital deployment across diverse asset classes has made it indispensable for private investors seeking structured, EU-compliant solutions.
Luxembourg's market share in Europe's alternative investment funds in 2022:
Fund Domiciles by Proportion of Capital Raised in Europe:
Source: Preqin
One of Luxembourg’s key strengths is its appeal to private debt funds and direct lending structures, which provide non-bank financing options for all companies, from SMEs to large corporates across Europe. With Luxembourg accounting for the vast majority of Europe-focused private debt capital according to Preqin, the country’s regulatory framework and sophisticated infrastructure support growing investor interest in private credit as an alternative to traditional financing. This focus on private debt enhances Europe’s financial flexibility by offering companies an additional source of diversified funding, while also appealing to institutional investors with its potential for superior returns compared to traditional fixed-income instruments. Supported by Luxembourg’s robust regulatory environment under AIFMD, private debt promotes various financing options within the Single Market, strengthening the ecosystem for both issuers and investors.
Luxembourg’s Limited Partnership (SCS/SCSp) structure has also gained substantial traction among private equity and venture capital funds. Offering flexibility and tax neutrality, SCS and SCSp partnerships have become the preferred vehicles for managers targeting EU growth investments. These structures allow for seamless pooling of capital, making it possible for venture capital and growth equity funds to back high-potential startups and early-stage companies across Europe.
This setup aligns with the EU’s ambitions to foster innovation and maintain a globally competitive economy driven by emerging sectors.
Luxembourg’s role as Europe’s leading hub for private assets is further supported by a robust network of specialised custodians and administrators. These institutions provide comprehensive back-and-middle office, as well as compliance support, ensuring that private asset managers can meet EU regulatory standards while focusing on strategic expansion. This infrastructure enables Luxembourg to support sophisticated asset management operations across private equity, real estate, and private debt funds, fostering a highly integrated investment environment that serves Europe’s competitive needs.
Luxembourg’s ambition is to reinforce its standing as the EU’s foremost hub for private assets, adapting its offerings to align with Europe’s economic priorities. With continuous enhancements to its regulatory framework and investment structures, Luxembourg is poised to attract the private capital essential for a competitive, resilient EU economy that is primed to lead in a dynamic global landscape.