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Luxembourg to exempt microfinance investment funds from subscription tax

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In its proposal for the State Budget 2010, to be adopted by the Luxembourg Parliament in December, the Luxembourg Government has included an exemption from subscription tax for microfinance investment funds.

It follows a recommendation issued by the Association of the Luxembourg Fund Industry which has considered for a long time that the elimination of the subscription tax will encourage the development of this fund type in Luxembourg.

Alfi chairman Claude Kremer stated in a press conference on 18 September: “These funds accomplish an important social and philanthropic role that complements public action and cooperation efforts. Clients investing in these funds will react favourably to this decision.”

In order to drive industry efforts, Alfi has recently set-up a dedicated Microfinance Working Group which recently published a brochure titled “Luxembourg Centre of Excellence for Microfinance Investment Vehicles”.

Thomas Seale, chairman of the group, says: “This leaflet highlights the growing demand for investments in microfinance and Luxembourg’s ambition to become a leader in the domiciliation of microfinance investment vehicles.”
Forty five per cent of worldwide microfinance investment vehicles assets are based in Luxembourg.

In order to raise awareness of this growing asset class, Alfi, in association with the Luxembourg Fund Labelling Agency, are holding a microfinance conference on 25 March 2010 at the Chamber of Commerce of Luxembourg.

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