Page 245 - Invited Paper Session (IPS) - Volume 1

IPS152 Paul F.
straightforward. Do businesses invest in Luxembourg because of light
regulatory burden, low taxes, skill of the workforce, political stability, or other
criteria? Only a qualitative survey could theoretically answer those questions.
As for (iii), captive financial institutions do not fall under the control of
Luxembourg supervisory body. The same goes for most Luxembourg
Securitization Vehicles and for some Investment Funds.

SPEs status of selected Luxembourg financial institutions
Supervised Controlled by direct SPE /
investors/held by Non SPE
minority investors
Yes No
S.124 Invest. Funds Biggest Non- Minority investors/ Non SPE
part of the Regulated Investment fund
population Alternative shares liability<->
Investment Portfolio
Fund Investment

S.125 Overall Vehicles Largest part Minority investors / Non SPE
Securitizatio Issuing of the Debt securities
n. Vehicles debt on population issued <->Portfolio
open Investment
markets
S.127 Captive Complete Equity directly or SPE
Financial population indirectly held by a
Institutions foreign institution
or foundation <->
Direct investment
Source:BCL

3. Luxembourg SPE’s typology (IMF report - Annex VI)
Luxembourg SPE aggregate balance sheet declines slightly in 2017 and
more significantly in 2018. Following IMF report’s typology, we distinguish
between four main groups of SPEs: Conduits and pure holdings models are
declining, while the intra group lending model is much more stable. The
decline is mainly explained by two factors: First, Luxembourg signed the
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent
BEPS (Base Erosion and Profit Shifting) in June 2017. The progressive phasing
out of some financing arrangements incompatible with BEPS will probably

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