Professionals of the Financial Sector (PSF) in Luxembourg
2019 - At the heart of regulatory and tax environments
As at 31 December 2018, 280 PSFs (Professionals of the Financial Sector) were subject to the prudential supervision of the CSSF compared to 289 as of 31 December 2017. By the end of 2018, they employed 16,526 people in total compared to 15,442 as of 31 December 2017, with their total balance sheet having amounted to €8,965 million as of 31 December 2018, compared to €8,377 million a year before. Their net results year-on-year decreased from €576 million in 2017 to €545 million for the year 2018.
While employment in PSF shows growth, the number of PSF under CSSF supervision and especially net results are decreasing, which is a sign of consolidation in the sector. The evolutions are quite similar for the three different categories of PSF with a high decrease in the net result for investment firms compared to the previous year. There are however disparities within the three categories of PSF.
PSF sector is maturing, consolidates in terms of number of PSF but has indicators showing progress, within a continuously evolving regulatory and tax environment. We therefore thought it is appropriate to help decision-makers (whether already established and seeking to expand operations or keen to establish a PSF in the Grand Duchy) better understand the statuses that the name PSF encompasses, and the relevant regulatory requirements necessary to obtain such status.
This document aims to provide readers and decisions-makers with a practical tool summarizing the advantages and conditions of obtaining PSF status licenses. Through a dynamic presentation of the main categories of PSF, we will present the various PSF statuses that make up the financial sector landscape in Luxembourg, focusing additionally on the tax matters inherent to these structures. Lastly, fast-reference sheets are provided for each sub-group summing up the required conditions to retain PSF status depending on the licenses.
To begin with, to enlighten readers about the world of PSF, we will give brief but precise insight into the legal, regulatory and tax environments, including the framework of prudential supervision, applicable to PSF in Luxembourg.