The Trust & Corporate Services sector in Luxembourg
Autumn 2013 report
This report, carried out in collaboration with the members of LIMSA (Luxembourg International Management Services Association asbl), describes the main investment vehicles available to Luxembourg providers and demonstrates the confidence that the major Trust & Corporate Services players have in the future of the industry.
Located at the heart of Europe, the Grand Duchy of Luxembourg is a leading international financial centre. Luxembourg's social, legal and regulatory stability, as well as its skilled, multicultural and multilingual workforce, have been attracting economic and financial players from all over the world for many years.
In order to help these groups to set up and develop, the Grand Duchy has over time built up an attractive series of investment vehicles such as holding companies (SOPARFIs), investment companies in risk capital (SICARs), specialised investment funds (SIFs) and private wealth management companies (SPFs).
This legal framework, combined with Luxembourg's openness, has attracted investors and corporates from all over the world. In turn, this has boosted the development and growth of another industry: the Trust & Corporate Services sector. There are currently around 340 Trust & Corporate Services providers in Luxembourg. In the face of globalisation and increasing complexity of the regulations that govern their clients, they have become specialists in the incorporation, domiciliation and administrative management of companies.
Today, with the diversity and expertise of its Trust & Corporate Services providers, the industry has become one of the key assets of Luxembourg as a financial centre.
What is the Trust & Corporate Services sector?
The Luxembourg Trust & Corporate Services sector is regulated by article 1 of the law of 31/05/1999. This law defines a Trust & Corporate Services operator as a natural or legal person that provides a registered office at its own address to one or more companies in which it is not exerting significant influence.
In addition to the provision of a registered office, Trust & Corporate Services providers can offer a range of services related to this activity. Companies with their registered office in Luxembourg are subject to Luxembourg law, with a broad range of specific legal structures to choose from. Domiciliation is therefore the service offered by a Trust & Corporate Services provider consisting of using its registered office as the registered office of its clients (companies). Companies with their registered office in Luxembourg are thus subject to Luxembourg law, meaning they enjoy access to many types of specific legal structures.
Besides offering the initial incorporation and domiciliation, the Trust & Corporate Services provider will accompany a project throughout its development, ensuring compliance with the law. As a result, it is often an important partner for companies and the clients that have entrusted it with their administrative management, company secretarial and accounting functions. A Trust & Corporate Services provider is therefore more than just a service provider and may be liable if it fails to monitor the companies' actions properly on a daily basis.
Lastly, the Trust & Corporate Services provider has the legal obligation to know the identity of the persons for whom it is acting. This obligation covers the shareholders and members of the management bodies of the domiciled company, as well as its ultimate beneficial owners. Section 3.3 takes a more detailed look at the specific attributes of Luxembourg and the qualities of its Trust & Corporate Services providers.