Legal Market Overview
Despite its small population size, Luxembourg truly punches above its weight as a financial centre and, aided by a business-friendly regulator and relatively favourable tax laws, it remains one of the leading worldwide fund jurisdictions. At the vanguard of change in the sector, Luxembourg remains an uncontested leader for retail funds utilising the Undertakings for Collective Investments in Transferable Securities (UCITS) regulatory framework and has also successfully leveraged its position at the vanguard of the UCITS industry to establish itself as a prominent player on the alternative investment funds side. The vibrancy of the funds market is one of the primary reasons for the country’s popularity among law firms; and as well as being home to large independent law firms, including Arendt & Medernach and Elvinger Hoss Prussen, many major global firms have offices in the Grand Duchy, with Norton Rose Fulbright and Eversheds Sutherland among the most recent to establish offices and thereby joining established global leviathans, including Linklaters, Allen & Overy Luxembourg and Clifford Chance, as part of the vibrant legal market.
M&A activity is also a central pillar to most of the firms’ business strategies in the region, and with a significant amount of cross-border M&A matters structured utilising a Luxembourg corporate vehicle, it is understandable that firms vigorously compete for such work. Although the majority of the transactional work derived out of Luxembourg is of a cross-border nature, the UK’s recent decision to leave the EU has led to an increase in financial entities (including insurers, and asset managers) choosing to establish operations in the country. Increased regulatory strictures have also led to an increased level of consolidation in the Luxembourg financial services market and have therefore led to an unusually high level of domestic M&A.