Jersey and Luxembourg

A recent visit to Luxembourg offered us the chance to gain an understanding of a financial jurisdiction with natural links to Jersey. A number of clients have established a presence in the country and this pan-jurisdictional approach seems to work well for companies wishing to adopt a complementary onshore/offshore approach.

At a funds event focusing on the next steps for the Alternative International Fund Managers Directive (AIFMD), it was clear that Luxembourg, both its businesses and the Government, are striving to be among the first jurisdictions to offer AIFMD compliant legislation and are making a concerted effort to ensure everything is in order to attract as much business as possible.

Similarly, Jersey has also committed to offer an AIFMD compliant regime and there will be a race to see which jurisdiction across the EU will be first. Traditionally, Jersey battles against a lethargic legislative environment, which may create challenges to be first to the AIFMD compliant post.

An interesting challenge facing Luxembourg is its workforce. Thousands of cross-border commuters travel to work from France, Belgium and Germany each day. As one observer we met mentioned, many of the workforce are from rural environments which do not have sophisticated finance industries and, as such, do not have the standards of training and qualifications which is so highly regarded and imperative in jurisdictions such as Jersey, which for example apparently has among the highest per-capita qualified accountants in the world.

The strengths and apparent weaknesses of each jurisdiction is perhaps what makes the two a natural fit for businesses looking to capitalise on new legislation and opportunities in financial services.

LD