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Luxembourg, February 11, 2014 – Experta Corporate and Trust Services SA (Experta), a wholly owned subsidiary of Banque Internationale à Luxembourg (BIL), has decided to refocus on its core business and has strengthened its management team. Experta now has around 50 professionals providing Global Corporate Services to international customers seeking to structure their asset acquisitions, holdings, management and transfers as well as their private equity and real estate investments.

In today’s highly regulated and secure environment, Experta’s number one objective is to meet the needs of an increasingly demanding clientele by offering customised solutions and services as part of a highly professional package.

With this in mind, the Corporate Services, Accounting Services, Tax Services and Investment Funds Services teams have been expanded and reorganised, allowing them to provide high value-added services covering everything from the creation, management, domiciliation and administration of regulated and unregulated investment vehicles to the use of hybrid financing and investment tools.

The market teams, now part of the Markets & Business Development department, will be actively involved in promoting Experta’s services, both in Luxembourg and elsewhere in Europe (Germany, France, Switzerland and the UK) as well as further afield (Asia, Latin America, the Middle East and Russia).

Based on the concept of open architecture, Experta will also strengthen its ties with law, audit and accounting firms and with various financial entities, family offices, private equity firms and other asset/investment managers so as to offer its customers the most comprehensive range of wealth management and wealth structuring solutions possible.

Adrian Leuenberger, member of BIL’s Management Board and Head of Wealth Management, welcomes Experta’s new focus: “Experta is responding to the very recent shift in the needs of private, corporate and institutional customers who are now looking for compliant and innovative investment and asset structuring solutions which must reflect the regulatory and legislative developments that have taken place in Luxembourg and throughout the world in the last few years.”

Experta, a new management team

Jean-Marie Bettinger, CEO, is a tax lawyer with 15 years of experience managing wealth. Before joining the BIL group, he held the position of General Manager at T&F Luxembourg. Prior to that, at MDO/TDO, he oversaw, as an independent director, a diverse range of Luxembourg-regulated investment and commercial companies. He also was involved in setting up a Luxembourg multi-family office, as the Managing Director of Reyl Private Office (Luxembourg).

Fabio Mastrosimone, Head of Markets and Business Development, is a tax lawyer with 12 years of experience in wealth management. After working in sales at SEB, he joined Experta in 2006 and, in 2010, took over the management of the South Europe & LatAm markets. He is currently in charge of wealth management sales operations.

Cécile Methlin, Chief Financial Officer, has a Master’s degree in Business Management specialised in accounting and finance. She began her career in a trust company and now boasts over 15 years’ experience in finance, management control and project management. She joined BIL in 2011 before becoming part of Experta’s management team on February 1, 2014.

Magali Micheletti, Head of Corporate Services, has a Master’s degree in Applied Languages. With over 10 years of experience as a legal consultant, notably at Clifford Chance, she joined Experta’s management team on January 15, 2014. Before moving to the BIL group, she was Deputy General Manager at T&F Luxembourg.

Dominique Van Giessen, Head of Compliance, Legal & Secretary General, is a qualified lawyer and economist with over 20 years’ experience in the fields of risk management and compliance. She joined BIL in 1992 and specialises in issues specific to institutional customers. After moving to Experta in 2010 she became a member of its management board at the end of 2013.

Our new website is now online! Thank you for visiting it. We’d love to hear your feedback, do not hesitate to send it to experta@experta.lu

Today, in period of uncertainty in the economic climate which leads to the questioning of the current financial system, Islamic finance seems to increase in popularity and tends to become a sustainable alternative to conventional finance.

Ruled by the shariah’s principles, Islamic finance’s main characteristic is the moral prohibition of interest earnings or usury and money lending together with investments in direct or indirect association with  “sinful” activity such as business involving alcohol, pork products, firearms, adult entertainment as well as any sort of speculation, betting and gambling.

In this context, given that only interest free forms of finance are considered permissible and in line with shariah’s principles, financial relationships between cash-holders and borrowers need to be based on risk-sharing and returns from investments in authorized activities.

In light of these moral requirements, different “products” or “concepts” have been created in order to find alternatives to conventional financing that enable to achieve the double objectives of being shariah-compliant and at the same time fiscally optimized.

Shariah – compliant “instruments”

The most popular shariah-compliant “concepts” or “instruments” that can be used to structure investments are the following:

• Musharaka (partnership);
• Mudaraba (partnership separating the cash-holders and the managers);
• Murabaha (sale with a differed payment);
• Ijara (leasing);
• Sukuk (profit participating bonds).

Luxembourg proactivity to adapt economic and legal framework to Islamic financing

With its dynamism and strong capability to adapt its legal and economic framework, Luxembourg became a key place for investment structures dedicated to Islamic finance in Europe and worldwide.

Investors are also drawned by an attractive tax regime, a well adapted legislative framework, the availability of professional expertise and as skilled multi-lingual workforce.

The legal and tax framework of Luxembourg has been adapted in order to ensure that shariah – compliant products and services could be created for structures with Luxembourg vehicles. Two circulars¹ have been indeed issued by the Luxembourg tax authorities in order to provide with clear guidelines on the tax treatment of shariah – compliant «concepts».

Well adapted investment vehicles for Islamic finance

In parallel to its strong position as the most popular place for the domiciliation of regularized funds such as UCITs, Luxembourg has built up a strong experience in hedge funds, private equity and real estate funds.

Indeed, with its broad range of investment vehicles (SIF, SICAR, securitization vehicles, SOPARFI) combined with a flexible legal and tax framework based on the economic reality (the substance over form principle), sophisticated structuring in line with the shariah – principles can be tailored-made for the investor’s needs.

Luxembourg, July  2012

[1] A circular issued on 28^th January 2010 respectively on 12^th January 2010 clarifying the direct and indirect tax treatment of Murabaha, sukuk and Ijara contracts

In the frame of maximizing the exploitation and management of eligible intellectual properties (i.e. “IP”), companies and individuals holding such intangible assets show increasing interest in favorable IP tax regimes that several European countries have enforced in their own jurisdiction.

The purpose of this newsletter is to provide with a high level comparison of the IP tax regime in place in Luxembourg, Belgium, Netherlands and Ireland.

The eligible IP rights are the following:

Luxembourg

Patents and self-developed patents, trademarks, design and models, (software) copyrights, domain names.

Belgium

Limited to patents and extended patent certificates (i.e. improvement to existing patents)

The Netherlands

Limited to self-developed patents, intellectual property from innovation (patented or R&D certificate) and pant breeders’ rights

Ireland

Patents, registered designs, trademarks and brand names, copyrights and publishing titles, domain names, know-how, service marks, products of designs, formulas, processes or inventions

Based on the above, Ireland has the widest scope of eligible IP rights, closely followed by Luxembourg. The main difference between Ireland and Luxembourg in terms of eligible IP is that Ireland’s IP regime includes know-how and formulas that do not need to be registered. It is worth mentioning that the patent income exemption is no longer available in Ireland but the IP still continue to benefit from tax incentives by way of tax credit or deduction for certain expenditure.

Please find below a high level summary of the main characteristics of the IP tax regimes of the above-mentioned countries, with the exception of Ireland, where the patent income exemption is no longer available.

Countries	Legal ownership required	Qualifying income	Basis of reduction	Effective tax rate
Luxembourg	No	IP income and capital gain	80% exemption on net IP income and capital gain	5.76%
Belgium	Yes	IP income but capital gain excluded	Deduction of 80% on the gross qualifying IP income	6.8%
Netherlands	Yes	IP income and capital gain	N/A	5%

As highlighted in the above chart, Luxembourg has competitive arguments to become and be the future “IP Hub” in Europe and even on a worldwide basis.

Luxembourg, March 2012

 

 

DTT with Russia	Luxembourg (based on the amendments to be ratified)	The Netherlands	Cyprus
Dividends	5% if qualifying entity (minimum shareholding of 10% and acquisition price of at least EUR 80.000);15% otherwise	5% if qualifying entity (minimum shareholding of 25% and acquisition price of at least EUR 75.000);15% otherwise	5% if qualifying entity (shareholding of an acquisition price of at least EUR 100.000);10% otherwise
Interest and royalties	0%	0%	0%
Capital gain on immovable property	Exclusive right to tax in the State where the asset is located	Exclusive right to tax in the State where the asset is located	Exclusive right to tax in the State where the asset is located
Capital gain on real estate shares (more than 50% of the value of the shares deriving from immovable property)	Exclusive right to tax in the State where the immovable property is located	Exclusive right to tax in the State where the alienator is tax resident	Exclusive right to tax in the State where the alienator is tax resident
Access of the DTT to SICAV and SICAF	Yes (including SIF under the form of SICAV or SICAF)	N/A	N/A

As highlighted in the above chart, further to the amendments of the Luxembourg-Russia DTT, Luxembourg would become an attractive jurisdiction for structuring investments in Russia and would have all the weapons to compete with Cyprus and the Netherlands.

Attention should however be kept to real estate investment in Russia which would need to be carefully structured.

Luxembourg, December 2011