We all have different interactions with our bank in our daily lives: our salary is transferred to our bank account, money is debited to charge our credit cards, money in our savings account is used to pay our children’s studies, monthly payments for our house or car loan are deducted, etc.
However, in addition to these routine operations (known as retail banking) there are
also more specific operations. The more assets a person holds – from business revenues or inheritance – the more sophisticated banking services they may need, including portfolio management, succession planning, tax management and much more. This is then referred to as wealth management.
Since the 1980s, Luxembourg has evolved to a European and international centre of private banking and asset management. Luxembourg used to be known specifically for its so-called banking secrecy and although this secrecy was never absolute, it allowed people to evade their fair share in tax contributions. This is no longer possible today. All information relating to the accounts of non-residents is forwarded to the tax authorities of the account holder’s main country of residence.
And despite these very strict international rules, Luxembourg remains an important international wealth management hub. Because the success of our financial centre is based on a number of important criteria:
- a unique expertise to support clients in a multijurisdictional context
- the legal framework
- economic and political stability
- the AAA rating (the best score possible)
- a low level of public debt through prudent management of public finances (this is an important factor in ensuring that clients feel that their assets are well looked after in Luxembourg)