Can you give one example of a way that Brexit has resulted in a change for you or your organisation?
Jervis Smith. – “One change for our organisation is the impact on our Asian counterparts.
Vistra, being headquartered in Hong Kong, has a good idea of the level of importance Brexit sustains on the world stage. The US elections, the events in Hong Kong as the Chinese seek to restrict democracy in that country and the impact of Covid on trade have been much more significant so far than our parochial squabbles over Brexit. The Barnier-Frost discussions seemed like a family tiff to Asians.
However, we cannot ignore some of the questions that Luxembourg companies seeking to do business with Asia should attempt to answer and anticipate Asian clients asking the questions when they are looking at European activity (such as ‘where’s best to locate my European hub’?, or ‘what’s the change to tax treatment from Brexit?’ or ‘which centre has the optimum talent pool?’).
Keep in mind that the world’s largest banks have set up their European headquarters here in Luxembourg from Asian countries, especially China. Certainly, for asset management or fund administration, Luxembourg remains the obvious choice because of the undoubted popularity of Luxembourg based funds and their passportability across Asian markets.
Making it clear to Asian companies what are, and are not, the restrictions on operating in Britain and in Europe from one central hub and how feasible that strategy is now is the key duty that we bear at Vistra.
If you could advise the Luxembourg government on ways to go forward to capitalise on Brexit, what would you say?
“Brexit has generated interest in Luxembourg from the UK wishing to continue to do business in Europe and considering setting up offices with some substance in European.
However, is there a sufficient supply of talent locally and will UK firms be able to find the right skills to avoid relocating people here? This capacity issue should encourage the Luxembourg government to look into ways to expand the talent pool such as flexible or remote working.
The University is also a place we can seek to attract talent at an early age to the merits of this wonderful place. So special scholarships and courses focused on the services industries will help.
It is clear that there is interest in Luxembourg from the UK companies. Industries such as space and fintech or regtech are also clearly areas of focus for Luxembourg and the Lhoft has reported a surge in interest from venture capital firms looking to establish a European base that we can service.
Therefore, we can also help the government to publicise the attractiveness of the country by passing the message to our colleagues in the UK. With language no longer a barrier, free healthcare, free schools, free transportation, certainly for people considering starting a family, there can be few places that are more attractive than is Luxembourg.
The housing supply to accommodate the influx of even a 1,000 jobs created by Brexit should be taken into consideration by the Luxembourg government.
We can also look at making the corporate tax and VAT environment favourable.
If we were having this conversation in five years’ time, what condition do you believe the EU will be in?
“It is an interesting question as to how the mishandling of the coronavirus crisis will impact the EU in the medium term. Closing borders was a shocking act of disdain for the principles that act as the cornerstone for a Union. The unedifying scramble for vaccines too and the delays while the EU agreed a united approach to buying them has not helped the image of the EU. Northern Ireland will also test the relationship between UK and EU for years to come.
Will the UK rejoin before a second nation leaves? One thing is for sure, Luxembourg will continue to benefit as a country from pragmatic mediation.”