Luxembourg is the largest investment fund centre in Europe (second worldwide). It is currently considered as a major international hub for financial services and Islamic finance investments. Strong government support and commitments to Islamic finance, proactive regulatory and supervising authorities and a flexible and secure legal framework offers a wide range of opportunities for implementing faith-based ethical finance transactions, for devising Islamic finance products adapted to the need of the most demanding clients and for establishing Shariah compliant investment funds and vehicles.

Double tax treaties with Bahrain, Qatar, the United Arab Emirates and Kuwait have recently been signed with the Grand duchy of Luxembourg in addition to more than fifty existing double tax treaties. These treaties may offer an attractive tax scheme for repatriating profits made by a Luxembourg company. Indeed, under certain conditions, a Luxembourg law of 16 December 2008 reduces the withholding tax on dividends paid by a Luxembourg company to its parent company located in country with which a double tax treaty has been concluded to 0%.  Furthermore, a recent circular from the Luxembourg tax authorities (Circular L.G.A. n° 55 of 12 January 2010) clarifies the tax treatment of the most current Islamic finance products such as Sukuk and Murabaha. This circular inter alia classifies the Sukuk as a conventional financial debt instruments for Luxembourg tax purposes allowing the tax deductibility of yield payments made under it.

In November 2009, the Grand Duchy of Luxembourg was the first European country to become an associate member of the prudential standard setting body for global Islamic finance, the Islamic Financial services Board.

With a local presence in the United Arab Emirates, CHEVALIER & SCIALES seeks to better service local finance institutions and investors who wish to use the Luxembourg jurisdiction as a gateway for their financial and investments projects.

FOR FURTHER INFORMATION PLEASE CONTACT:

In Dubai

CHEVALIER & SCIALES, Dubai representative office

Level 41 Emirates towers

P.O. Box 31303

United Arab Emirates

Tel: +971 4 319 7903

Fax : +971 4 319 7904

In Luxembourg

Olivier Sciales, oliviersciales@cs-avocats.lu

Rémi Chevalier, remichevalier@cs-avocats.lu

CHEVALIER & SCIALES, Luxembourg office

51, route de Thionville

L-2611 Luxembourg

Grand Duchy of Luxembourg

Tel : +352 26 25 90 30

Fax : +352 26 25 83 88