At the centre of the European Union (EU) – as shown by the location of the European Investment Bank in Luxembourg – it’s a leading financial centre. For companies, high-net-worth individuals and fund distributors alike, it’s an increasingly attractive destination.
A leading European centre for wealth management and fund distribution
Europe’s largest private banking centre
Luxembourg is Europe’s largest private banking centre, having grown steadily for decades. By the end of 2024, it had EUR 756 billion in assets under management, up 14% on the year from EUR 662 billion at the end of 2023 (KPMG Private Banking Report 2025). Since 2007, assets have almost tripled from USD 271 billion. Illustrating Luxembourg’s cross-border appeal, almost three quarters (72%) of 2024’s assets came from international clients.
The country has a range of sophisticated legal structures for holding family wealth across multiple jurisdictions. This is backed by a first-class wealth management ecosystem, including expert wealth planners, lawyers, trustees and accountants.
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Leader in cross-border fund distribution
Turning to investment funds, Luxembourg is a worldwide leader in cross-border distribution of mainstream and private markets funds. Luxembourg domiciled funds are distributed in more than 70 countries around the world.
The total assets under management of funds domiciled in Luxembourg amounted to EUR 7.6 trillion at the end of August 2025. They had risen by 8% year on year. (Association of the Luxembourg Fund Industry)
Luxembourg has moved quickly to set up structures for funds that can be marketed across borders. In 1985, when the EU introduced its UCITS directive for funds that could be passported across member states, Luxembourg moved faster than any other country to adopt and implement it. Luxembourg has also moved quickly to introduce fund structures for alternative assets.
Like the private banking sector, a large ecosystem supports the sector. This includes depositary banks, fund administrators, transfer agents, distributors, lawyers, accountants and communication companies.
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A stable international centre
Luxembourg’s stability is increasingly unusual at a time when other countries are struggling with political volatility and high levels of public debt. It’s also rated as an enjoyable place to live. While not all of these qualities may seem directly the attributes of a financial centre, they foster the stability that allows Luxembourg-based companies, family offices and high-net-worth individuals to plan ahead and attract wealthy individuals.
Below are some facts illustrating Luxembourg’s appeal:
Quality of life
- Luxembourg ranked 11th in the EIU’s Global Liveability Index 2025. Notably, it was one of the year’s biggest risers.
- Luxembourg is rated the 14th safest country in the world in 2025, according to the World Population Review.
- An open and international culture, with Luxembourgish, French and German used as administrative languages, further enriched by the mandatory inclusion of English in the school curriculum.
Financial and fiscal strength
- Aaa long-term credit rating from Moody’s Ratings reflects exceptionally high wealth levels, a dynamic and flexible economy and the sovereign’s very strong balance sheet. · Government debt is far lower than in many other European countries, at 26.3% of gross domestic product (GDP) at the end of 2024, forecast to rise slightly to 27.5% of GDP by end of 2025. (Moody’s Ratings)
Political stability
- Luxembourg ranks 4th out of 132 countries in terms of political stability. (Cornell University, INSEAD & WIPO (2022))
- Competitive and effective tax architecture. Luxembourg ranks 6th in the International Tax Competitiveness Index Rankings, with a high score for cross-border tax rules. (Tax Foundation, October 20, 2025)
- For private clients and investment funds, Luxembourg has created a highly effective tax architecture, with an extensive double-tax treaty network extending to over 80 jurisdictions, flexible investment structures and a proactive approach to reform.
