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Luxembourg eyes more investment from UAE

European country has so far attracted 500m euro in various funds

Gulf News

Abu Dhabi: Luxembourg has so far attracted around euro 500 million (Dh2.485 billion) from UAE investors in its various investment funds and is eyeing more, Luxembourg's Minister of Finance Luc Frieden said yesterday.

"We don't have a specific target [for investments from the UAE], but, there is a lot going on in our financial services sector. There are about 7,000 investment funds and 150 banks in Luxembourg," Frieden told reporters here.

"We also have a treaty with the UAE to avoid double taxation," he added.

Frieden said Luxembourg plans to open an embassy in Abu Dhabi later this year which would help facilitate regional investments in Luxembourg. Frieden said they are also eyeing investments in Luxembourg from other countries of the Gulf Cooperation Council (GCC).

Lower returns

Frieden said through the investment funds, the invested money goes into the entire European Union.

"The stability of the Eurozone is guaranteed and we have bank confidentiality rules," he added.

Asked about the relatively lower returns on investments in Luxembourg compared to some of the emerging markets, Frieden said lower yields are a reflection of stability.

"Luxembourg is an international financial services centre. It is the world leader in investment funds which are legal products and they channel international investments through Luxembourg into Europe," he added.

According to KPMG, Luxembourg is currently Eur-ope's number one investment fund centre and the second worldwide behind the US. In July 2010, net assets managed by Luxembourg's investment funds were valued at ¤2.019 billion euros. Additionally, Luxembourg is emerging as a prime location for Islamic finance. There are currently around 16 sukuk listed on the Luxembourg Stock Exchange.