Luxembourg is about to shed its reputation as one of the EU’s largest tax havens
Cracks to international pressure.
Luxembourg Finance Minister, Luc Frieden, announced today that Luxembourg was willing to share account information on global multi-national companies going forward. This extends current information sharing agreements which are limited to US and EU individual tax payers.
"Luxembourg is comfortable to share information about multinationals as well as individuals," Mr Friedan said. This will help shed Luxembourg’s reputation as one of the EU’s largest tax havens.
According to WealthInsight, Luxembourg is the 5th largest private banking centre in the world with assets under management (AuM) of US$350 billion at the end of 2012.
Luxembourg also had mutual fund assets of US$2 trn and additional bank assets of US$550 bn as of year-end of 2012. These figures together amount to US$2.8 trn, which equates to almost 50 times Luxembourg’s GDP of US$57 bn in 2012.
It also equates to over 30 times the total wealth held by locals in the country (US$91 bn). This is an extremely high ratio when considering that Luxembourg is one of wealthiest countries in the world (in per capita terms).
According to the Credit Suisse Wealth Report, Luxembourg has the 8th highest wealth per capita,in the world at US$178,000 per person. This is well above the worldwide (US$28,000) average. Notably, Switzerland is the highest ranked country based on this measure with wealth per capita of US$293,000, followed by Norway in 2nd place (US$243,000) and Australia in 3rd place (US$239,000). The United States had a wealth per capita of US$172,000.
Going forward, WealthInsight expects Luxembourg private banking AuM to stay remain relatively static at US$350 bn, while countries such as Singapore surge ahead.
Singapore is expected to have private banking AuM of over US$2 trillion by 2020, compared to US$550 bin in 2012 and US$50 bn in 2000.