Luxembourg Holding Vehicles – A Hidden Gem Under Threat?

Luxembourg is not only a well-known fund hub but it is also a very attractive jurisdiction for holding or financing special purpose vehicles (SPVs), which attracts a lot of business every year. Benefiting in the past from the innovative tax and legal regulatory landscape of Luxembourg, this successful product is facing an increasing number of threats that jeopardize its future competitiveness in the international markets.

Luxembourg is not only a well-known fund hub but it is also a very attractive jurisdiction for holding or financing unregulated vehicle, so-called special purpose vehicles – SPVs. SPVs are used in PE, real estate, LBO, debt issuance or listings and these thousands of Luxembourg vehicles are also generating work for thousands of private sector employees in Luxembourg. We sometimes forget that our very finance driven economy in Luxembourg is not only based on regulated funds or banks but also materially on the use of Luxembourg based in SPVs in all