EU regulation ‘not to harm China investment’

16  January 2013

LUXEMBOURG — Luxembourg Finance Minister Luc Frieden said on Monday that EU’s financial regulation is an asset rather than a burden.

He made the comment in an interview with Xinhua when speaking about the impact of EU’s regulatory tightening on China’s investment in Luxembourg, especially in the field of finance.

Frieden said that EU’s regulation was aimed at creating a sound and stable environment for financial investment, not limiting its growth.

He also said Luxembourg, nicknamed “Switzerland of EU”, has always had a sound, stable and neutral environment for financial investment, which makes it a perfect bridgehead for Chinese financial companies to enter Europe.

“Once you gain a license in Luxembourg, you gain a license for EU,” he said, adding this advantage, combined with sound regulation, makes this small European country the world’s second largest center for investment funds, only after the United States.

According to official data, there are altogether 142 banks, 243 insurance companies, 3,864 investment funds and 324 professional intermediaries that have businesses in Luxembourg.

Liu Gang, general manager of the Industrial Commercial Bank of China Europe S.A., which set up business in Luxembourg in 1999, told Xinhua that Luxembourg gained its competitiveness thanks to its friendly business environment, stable political and social system, preferential taxation and highly trained personnel.

“The nominal income tax rate was about 28 percent, but through some legal management, the rate can be lowered to about 18 percent,” Liu said.