Luxembourg Fest 2016 Luxembourg American Cultural Society & Center
The assets of Luxembourg’s economy Michel Franck Managing Partner AIA President of the Luxembourg American Chamber of Commerce August 2016
11
Agenda
ü Introduction to Luxembourg’s economy ü Keep moving! Luxembourg – a diversified economy ü Good reasons to invest in Luxembourg ü Challenges & opportunities
22
Introduction to Luxembourg’s economy
Luxembourg - Get to know us
576,249 inhabitants (increase of 50% since 1991)
Source Luxembourg for Finance
33
Introduction to Luxembourg’s economy
Luxembourg’s place in the world
Non-Violence Knotted gun by Frederik Reutersnärd 44
Introduction to Luxembourg’s economy
Luxembourg : A European Laboratory
•
Direct market access to France, Germany and Belgium
•
International orientation of companies
•
500 million consumers in the EU
•
European fundamental freedoms
1000 km
55
Introduction to Luxembourg’s economy
An open and international business environment
NATIONAL PRODUCTION
SERVICEORIENTATION
CURRENT ACCOUNT
WORKFORCE
EDUCATION
80%
80%
High structural surplus
72%
20 European
of the
national production (goods and services) are exported
70%
of EU GDP within a travel day
of all exports are services
5.5%
of GDP in 2015, mostly due to net exports of services
of total workforce are non nationals
45%
of total workforce are cross-border workers from Belgium, France and Germany
universities and polytechnic schools within a 200 km radius
66
Introduction to Luxembourg’s economy
We are doing ok. Are we?
Macroeconomic picture of Luxembourg 2015
2016 (p)
2017 (p)
GDP Total employment Unemployment rate
4.8%
3.3%
3.9%
2.5%
2.6%
2.5%
6.4%
6.2%
6.2%
Inflation
0.1%
-0.1%
1.8%
Source: European Commission Spring Forecast May 2016
77
Introduction to Luxembourg’s economy
IMD World Competitiveness Yearbook 2016 2007
2008
4
5
2009
2010
2011
2012
2013
2014
2015
2016
6 12
11
- Exports of commercial services (#1) - Government budget deficit (#3) - Banking sector assets (#1)
11
12
13
11
11
- Renewable energies (#50) - Start-up days (#49) - Office rent (#48)
88
Introduction to Luxembourg’s economy
Diversified economy INDUSTRY & AUTOMOTIVE
ICT, MEDIA E-COMMERCE
LOGISTICS
FINANCE, BANKS, INVESTMENT FUNDS, INSURANCE AND OTHER SERVICES
EUROPEAN INSTITUTIONS
99
Introduction to Luxembourg’s economy
Dynamic financial sector..
Source: Luxembourg for Finance
10 10
Agenda
ü Introduction to Luxembourg’s economy ü Keep moving! Luxembourg – a diversified economy ü Good reasons to invest in Luxembourg ü Challenges & opportunities
11 11
A diversified economy
A wide range of new promising niche sectors… Logistics § 780 operators from all over the world and 13,000 jobs § Multi-modal strategy: rail, road, water, air § #1 for international shipments and timeliness § Cluster for Logistics & Luxembourg Maritime Cluster § Luxembourg Freeport
ICT § § § § §
Home to ICT global players Spectacular growth over the past decade Many points of intersection with other key sectors Attractive regulatory environment and state-of-the-art infrastructures High potential for diversification wihtin the sector
Health technologies § Personalised medicine § At the intersection of material sciences, ICT and biomedical research § Excellent infrastructures, e.g.: LCBS, Biohealth Cluster, LIH, LIST § Close collaboration : University of Luxembourg & companies 12 12
A diversified economy
… and a new strategy to create synergies
Clean technologies § 200 eco-companies in renewable energies, environmentally sound management of waste, environmentally sound management of water and eco-construction § 3 priorities: circular economy, mobility and smart cities § Saving energy: the « Learning Factory» § LëtzGreen
Space technologies § SES created in 1985 § Member of the European Space Agency since 2005 § Thematic areas: space telecommunications, global navigation satellite system and location based applications, maritime surveillance, space related technologies
Third Industrial Revolution § Towards a fully digitalised economy § Period of economic transition § Convergence of ICT, energy and logistics § Interconnectivity and greater adaptability of systems § Efficiency of resources 13 13
A diversified economy
Automotive components industry..
Source : Luxembourg for Finance
14 14
Quick facts
Automotive components industry..
Did you know?
Almost all cars worldwide rely on at least 1 key component developed in Luxembourg.
Source Luxembourg for Finance
Luxembourg connects 1 million Peugeot and CitroĂŤn vehicles with SIM cards.
15 15
A diversified economy
ÂŤ Hidden champions Âť in Luxembourg
16 16
Quick facts
The wine sector‌
Did you know?
Luxembourgish wine makers, which are famous for their pinot gris and sparkling crĂŠmants, won 20 medals (8 gold and 12 silver) at the 2015 Concours Mondial de Bruxelles.
Source Luxembourg for Finance
17 17
Agenda
ü Introduction to Luxembourg’s economy ü Keep moving! Luxembourg – a diversified economy ü Good reasons to invest in Luxembourg ü Challenges & opportunities
18 18
Good reasons to invest in Luxembourg
Did you know?
Source administrative services : Eurostat, Urban Satisfaction Rate 2013
19 19
Quick facts
Did you know?
Luxembourg ranks 9th o u t o f 1 4 1 countries for global innovation INSEAD Global Innovation Index 2015
Luxembourg is number 6 out of 28 countries for innovation performance
Luxembourg ranks 1 st in the world for technological readiness World Economic Forum Global Competitiveness Report 2015
Innovation Union Scoreboard 2015 European Commission
Source Luxembourg for Finance
20 20
Good reasons to invest in Luxembourg
Luxembourg’s success formula: open, reliable and dynamic!
• • • • • • • •
Central, strategic location in Europe Political and social stability Hotspot for cultural activities Melting pot of cultures and languages Open and neutral economy with sound fundamentals (AAA) A flexible & diversified economy « Hidden champions » A wide range of new promising niche sectors.. and a new strategy to create synergies
Source administrative services : Eurostat, Urban Satisfaction Rate 2013
21 21
Good reasons to invest in Luxembourg
Central, strategic location in Europe
by plane…
by car…
Source Luxembourg for Business
22 22
Quick facts
They say that...
“We were global from day one from Luxembourg.” Niklas Zennström Co-founder of Skype
Source Luxembourg for Finance
23 23
Good reasons to invest in Luxembourg
A good place to live: political and social stability
One of the highest standards of living in the world:
Gross national income per capita based on purchasing power parity in 2014
Source: AMECO
24 24
Quick facts
They say that...
“The stable, efficient and business oriented government is the key to Luxembourg’s success.” Wang Hongzhang Chairman of China Construction Bank
Source Luxembourg for Finance
25 25
Good reasons to invest in Luxembourg
Hotspot for cultural activities
Source: Luxembourg for Business
26 26
Good reasons to invest in Luxembourg
Melting pot of cultures and languages
A country widely open to the world
Daily flows of the cross-border workers
Source: Report on the Economic and Social Situation of the Greater Region 2013/14
27 27
Quick facts
Did you know?
Luxembourg counts the highest proportion of highly qualified people in its workforce in the world. World Economic Forum's (WEF) 2015 Human Capital report
Source : Wort
28 28
Agenda
ü Introduction to Luxembourg’s economy ü Luxembourg’s key advantages: Good reasons to invest in Luxembourg ü Challenges & opportunities
29 29
Challenges
Construction sites‌
30 30
Opportunities
Enhance competitiveness & diversification
31 31
Opportunities
Transatlantic Trade and Investment Partnership
32 32
Opportunities
Transatlantic Trade and Investment Partnership
33 33
Opportunities
Transatlantic Trade and Investment Partnership
34 34
Annex
Comply with new fiscal transparency standards COMMON BELIEF
WE DO COOPERATE AND COMPLY ü Gradual alterations to banking secrecy (still valid for Lux residents) :
“Luxembourg invites criminals from around the world, including some of the worst dictators as well as organized crime leaders and ordinary tax dodgers, to hide money."
- Exchange upon request - Following the requirement of the G20 and global forum - Act 25 November 2014 (modifying Act 31/03/2010) ->Luxembourg declared compliant on 30 October 2015 - Automatic exchange - With the USA - Within the EU - Worldwide
35 35
Annex
Show commitment in the future
Other tax developments : à BEPS à Parent Subsidiary Directive à Patent Box à Tax Amnesty
36 36
Luxembourg Fest 2016 Luxembourg American Cultural Society & Center
Thank you for your attention!
37 37