RFA
POLITICAL STABILITY
MAKES LUXEMBOURG A COMPELLING CHOICE Visitors to Luxembourg are often surprised and pleased to discover that public transport is free BY ROBIN PAGNAMENTA
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tep onto a tram in Luxembourg city, and there is no conductor to pay, and no machine to stamp tickets. In a drive to tackle traffic congestion and emissions, last year the Grand Duchy introduced a new policy where no charge exists for using the trains, trams and buses that criss-cross the small country sandwiched between Germany, France and Belgium. The policy is an attractive perk for its 602,000 residents, 175,000 cross-border workers and 1.2 million annual tourists. It’s also emblematic of something else: Luxembourg’s runaway economic success
LUXEMBOURG REPORT | SEPTEMBER 2021
and almost unrivalled political stability – which has become a magnet for its booming financial services industry – and generated a tax windfall to boot. Over the past few decades, Luxembourg has cemented its position as one of the world’s leading international fund domiciles, usually hosting the structures that are used by private equity firms, hedge funds and asset managers based in other centres like the US or UK. It’s a policy that has been so successful, for so long, that it has fuelled a powerful economic boom that has showered benefits across the entire country – including the
nation’s cheerful commuters, says George Ralph of business IT consultancy RFA. “Luxembourg has very successfully developed its funds industry, but has managed to do this to the benefit of the whole country,” he says. “As such, it has a triple-A rating and political stability.” He continues: “This political stability is crucial, as it mitigates the risk of subsequent legislative changes that could adversely impact fund complexes over the longer term.” LEGENDARY REPUTATION
This reputation serves as a powerful
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