Private Equity in Luxembourg: Navigating new tax rules and regulation

Global efforts to clamp down on financial crime and aggressive corporate tax planning also affect the private equity industry. Yet with the careful application of expertise, the rules can be navigated successfully.

Funding business innovation and growth through private equity should have little to do with the corporate structures of multinationals, nor the dark world of money laundering and terrorist financing. Yet with the industry being susceptible to money laundering risks, global rules on these areas have had their impact on PE funds. Hence why Pieter Leguit, a partner in the asset management and investment funds group with Simmons & Simmons Luxembourg, welcomes proposed EU legislation to further harmonise rules on anti-money laundering.

Level playing field

“The proposals would further level the playing field across Europe, and should have a considerable beneficial impact in Luxembourg,” Mr Leguit said. He highlighted how interpretations of AML rules by legislators and regulators still vary from country to country, and this can complicate matters for fund managers that operate cross-border. The proposals include a fully-fledged EU regulatory body devoted to AML/CFT. “A unified pan-EU regime will help the Grand Duchy maintain its leadership position,” he added.

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