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Bank of China (BoC) becomes first Chinese Financial Institution to list a Green Bond on the Luxembourg Stock Exchange (LuxSE)   WITH MORE THAN 110 GREEN BONDS LISTED IN 14 CURRENCIES BY 24 ISSUERS, LUXSE IS THE WORLD LEADING EXCHANGE AND IS DEDICATED TO PROMOTING THE GROWTH OF THE INTERNATIONAL GREEN BOND MARKET, PROVIDING THE MOST COMPLETE  LISTING AND DISCLOSURE SOLUTIONS IN LINE WITH THE MOST CURRENT GREEN BOND BEST PRACTICES. BANK OF CHINA SIGNALS ITS COMMITMENT TO GREEN INVESTMENT AND SOCIAL RESPONSIBILITY WITH  THE  FIRST CHINESE FINANCIAL INSTITUTION’S GREEN BOND ON THE  EUROPEAN CONTINENT AND THE FIRST MULTIPLE TRANCHES ISSUANCE OF GREEN BONDS EVER LISTED IN LUXEMBOURG. On July 13, 2016, the Luxembourg Stock Exchange (LuxSE) listed, and admitted to trading on its Euro MTF market, four green bonds issued by the BoC.  The bonds were issued by BoC under its US$20,000,000,000 Medium Term Note Programme.  Proceeds raised from the issuance of these green bonds will be used to finance projects that will promote renewable energy, pollution prevention, clean transportation and sustainable water management.   With a total issue amount of $2.8 Bn, the bond issue is made up of four different series: XS1437622621 U.S. $750,000,000, Floating Rate Notes due 2019 XS1437622548 U.S. $500,000,000, 1.875 per cent. Notes due 2019 XS1437622977 U.S. $1,000,000,000, 2.250 per cent. Notes due 2021 XS1437623355 EUR 500,000,000, 0.750 per cent. Notes due 2021   BoC established its market leadership in the European bond market in 2014 with the ‘Schengen Bond’, becoming the first Chinese Financial Institution  to list an offshore RMB Bond in Europe. With the present listing, BoC continues its Schengen Bond series as a first mover among Chinese Banks by becoming the first Chinese Financial Institution  to issue a Green Bond on the European Continent and list on the LuxSE. Of equal importance, BoC demonstrates its commitment to Green Finance and environmental responsibility and sets a standard for the global Green Bond market with this listing, by becoming the first bank to list multiple Green Bond tranches simultaneously under a single programme.    This listing further confirms LuxSE’s  position as the natural home of Green Bonds and LuxSE’s commitment to promoting the development of Green Finance and socially responsible investment.  It demonstrates LuxSE’s capability to bring further scale to the Green Bond market and its strong commitment promoting the evolution of the Green Bond market in line with the industry best practices. An event to mark this achievement was held by LuxSE in the presence of the Luxembourg Minister of Finance, Pierre Gramegna, Mr. Huang Changquing, Chinese Ambasador to Luxembourg and representatives of BoC and LuxSE.   Comments on the issue: Julie Becker, Executive Committee Member of the Luxembourg Stock Exchange, said:    “Today we celebrate a tangible milestone in achieving our role in facilitating the financing of the global transition towards a low carbon economy. We welcome Bank of China’s entrance into this segment, and commend them for showing their leadership in capital markets innovation. LuxSE provides issuers with proven solutions for optimisating of Green Bond disclosure and investors with innovative assesment solutions. ’’   Mrs. ZHOU Lihong, CEO at Bank of China in Luxembourg said:   “Today we reached another milestone in Bank of China’s Bond issuance history. Following the launch in 2014 of the first offshore RMB Bond by a Chinese entity in Continental Europe, the ‘Schengen Bond’, Bank of China Luxembourg Branch continued on this path by joining forces with Bank of China Head Office and successfully launched the ‘Green Schengen Bond’ on July 5th, 2016. This represents the very first Green Bond issued by Bank of China and the first Green Bond offering from Asia to be made in Europe. Despite the news about the ‘Brexit’ and the turmoil left in the financial markets, Bank of China succeeded to launch the biggest international debt sale of its kind, proving once again its attractiveness to and high recognition from professional investors. The "Green Schengen Bond" is an excellent demonstration of Bank of China’s determination to promote the green bond market development in Europe through its Luxembourg branch and our bank’s strong wish to continuously support Luxembourg in it’s strive to remain the leading Green Bond listing centre.’’   Pierre Gramegna, Luxembourg Minister of Finance said:   “The Luxembourg Government is strongly committed to the double objective of assuming a meaningful contribution to the global fight against climate change and continuing the development of Luxembourg as an international hub for climate finance. As a leading financial center in the heart of Europe with a global outlook and well established market expertise, Luxembourg plays a pivotal role in the funding of green entrepreneurship, supporting the growing market for green bonds and ensuring appropriate transparency. The LuxSE is well prepared to assume its role as a trustful partner offering the necessary guarantees for issuers and investors with a scope on sustainable development.”   About the Luxembourg Stock Exchange (LuxSE) With 40,000 listed securities, including some 26,000 bonds, from 3,000 issuers in 100 countries, LuxSE is the world’s number one exchange for the listing of international securities and offers a unique full service throughout listing, trading and reporting. LuxSE operates two markets: an EU regulated market (“Bourse de Luxembourg”) and an exchange-regulated market (“Euro MTF”). All securities are tradable on Euronext’s UTP platform. LuxSE also operates a specialist subsidiary, Fundsquare, which provides services to substantially support and standardize cross-border distribution of investment funds. More information on www.bourse.lu   LuxSE is the world leader for the listing of green bonds. As the leading stock exchange in the world for the listing of green bonds with more than 110 listings and as a capital markets intermediary committed to a sustainable economy, the Luxembourg Stock Exchange (LuxSE) facilitates access to green bond instruments for an increasing number of issuers, bearing in mind both the importance of appropriate disclosure for the integrity of the asset class at the service of investors specific environmental and performance goals and the opportunity to help green issuers with different fund-raising capabilities raise money in a most efficient way. We voluntarily participate in several initiatives, through dialogue with ICMA GBP, the Sustainable Stock Exchanges Initiative (SSE), the World Federation of Exchanges (WFE), Climate Bond Initiative (CBI),  the European Commission, the Luxembourg Government as well as issuers and investors, to promote long-term sustainable investment and improved environmental, social and corporate governance disclosure and performance among companies listed on our exchange. Please visit our green bond page on www.bourse.lu/listing-green-bonds   About Bank of China Limited, Luxembourg Branch   Bank of China Limited, Luxembourg Branch is a sub-branch of Bank of China Limited, China’s most internationalised and diversified bank. Bank of China Limited provides a comprehensive range of financial services to customers across the Chinese mainland as well as in 41 countries and regions. The Bank’s core business is commercial banking, including corporate banking, personal banking and financial markets services. Bank of China Limited, Luxembourg Branch was the first Chinese Bank established in Luxembourg in 1979. It was also the first banking branch established overseas by China after founding the People’s Republic of China. In 1991, Bank of China Group incorporated its first wholly-owned European subsidiary “Bank of China (Luxembourg) S.A.” which in turn has expanded the network to other EU countries over the years, opening branches in Rotterdam, Brussels, Warsaw, Stockholm and Lisbon. In recent years, Bank of China Luxembourg has expanded its business to reach new heights, and has achieved a predominant RMB market share in Luxembourg. In 2014, the bank became the first Chinese company not only to launch an offshore-RMB bond (called Schengen Bond) in Luxembourg and in the Eurozone, but also to list it at the Luxembourg Stock Exchange. In 2015, the Bank successfully became the first Luxembourg-based RQFII with approved license and quota, and incorporated an umbrella investment company “BOC (Europe) UCITS SICAV”. Today, as the Group’s European Regional Hub and European Asset Management Platform, the Bank provides a full range of comprehensive banking products and services tailored to meet the needs of its corporate, financial institutions and private clients. Standing as a group of 7 institutions in 6 countries, the Bank has over 190 employees of more than 15 different nationalities.
On 24 March 2016, a plan was unveiled for a future industrial site specialising in automotive component R&D. Located near Roost in the commune of Bissen, the future “Luxembourg Automotive Campus” will house the research and development departments of several automotive sector companies. The project includes plans for shared infrastructure, such as research labs and buildings, conference rooms, catering areas and exhibition spaces. With its proximity to the Goodyear test circuit, the site offers great potential for synergies in logistics, training and education, as well as testing and validating prototypes. The campus will also foster “open innovation” and the exchange of technologies. Industrial manufacturing activities are not planned for the site. The Luxembourg Ministry of the Economy first had the idea to create an innovation hub in 2013. The concept was then further developed by the “High Council for the support, development and promotion of industry”, with the support of the Association of Luxembourgish Automotive Suppliers (ILEA) and the Luxembourg Automotive Components Cluster, which is powered by Luxinnovation. The 14-hectare site will be bought by the government in order to build the infrastructure needed for an industrial estate. This will happen as soon as the current owner, Goodyear, has completely demolished the buildings currently standing on the site of the old “wire plant”. In an initial phase, both Goodyear and IEE will set up shop on campus. Active in Luxembourg since 1989, IEE S.A. will relocate all of its operations from Contern to the new estate in Roost. For its part, Goodyear is relocating its Luxembourg Innovation Center (GIC*L) to the campus. Building work on these two new facilities is expected to be completed in the summer of 2018, when they will provide room for a total of 1,600 members of staff from the two companies. During his statement, Étienne Schneider, Deputy Prime Minister and Minister of the Economy, emphasised: “By centralising these R&D activities, the Luxembourg Automotive Campus will provide professional automotive equipment and service providers with new tools and infrastructure, enabling them to remain dynamic – and thus also innovative and competitive – in a market in constant evolution. With the future capacity to accommodate 4,000 employees, the campus will be the future shop-front of the sector and will make of Luxembourg, more than ever, a destination of choice for automotive suppliers.” In Luxembourg, the automotive components sector currently employs over 10,000 people and has an annual turnover of EUR 1.5 billion. “The creation of the Automotive Campus will foster business growth opportunities within the European automotive sector for Goodyear, its campus partners and the country of Luxembourg. As a founding member and one of the first to locate at the Campus, Goodyear looks forward to collaborating with other progressive companies on the design, testing and incubation of new concepts,” said Jean-Claude Kihn, President Goodyear Europe, Middle-East and Africa. He added, “Innovation Excellence is a core element of Goodyear’s strategy. The company has been practicing a philosophy of open innovation around the globe for many years. Now we will expand it further by joining the Automotive Campus. In this way Goodyear continues to play an active role in the development of Luxembourg’s future economy.” Michel Witte, President & CEO of IEE S.A.: “Locating leading automotive organizations in the same area will naturally lead to synergies and benefits for everyone involved – both in terms of shared resources and enhanced innovation. But it will also help us to attract high-caliber talent to the region. And with the potential presence of some of the University of Luxembourg’s institutes, in combination with public research organizations, we could facilitate the preparation of students and post-doctoral candidates so that their skills could fit the requirements of the Campus members. A win-win situation for everyone.”   Press release from the Ministry of the Economy
Luxembourg City residents have the highest purchasing power of any city in the world in terms of net hourly pay, ahead of Geneva and Miami, according to the latest the latest Prices and Earnings study from UBS, which surveyed 71 business capitals worldwide. Purchasing power in Luxembourg is notably greater than in Frankfurt (24% higher), Paris (31%), Brussels (32%), London (37%), and Tokyo (40%). Workers in Luxembourg have much higher purchasing power than their peers in Frankfurt (24% higher), Paris (31%), Brussels (32%), London (37%), Tokyo (40%) and pretty much everywhere else. This finding features in the latest “Prices and Earnings” study published by the bank UBS. Purchasing power means a comparison between earnings and prices. UBS collected figures in 71 business capitals around the world. They measured average hourly salaries after tax and the price of an average “shopping basket” for all types of spending for an average three-person household. Unfortunately, rent and mortgage payments are excluded because the quality, size and location of homes vary too much to make for a meaningful comparison. With earnings and the cost of living measured, they were able to see in which town you would have the greater ability to buy the stuff on offer. As the graph shows, Luxembourg has similar purchasing power to Switzerland, but is about 15% ahead of the USA and is much higher than everywhere else. Mr and Ms average in Luxembourg have twice the purchasing power as their equivalent in Hong Kong, five times that of a resident of Shanghai and almost ten times that of someone in Mumbai. The report also looked at it another way. In Luxembourg you have to work 9 minutes to afford a Big Mac and 28 hours to pay for an iPhone 6. This day out would cost you 15 minutes plus 43 hours in Dublin, 16 minutes and 50 hours in Amsterdam and 19 minutes and 61 hours in Madrid. However, life is easier in Zurich if you live on McDonalds and WiFi. Although you would need to work for two minutes longer to get your Big Mac in the Swiss business capital, the iPhone would cost you seven fewer hours at work. All these figures come with a health warning. They are only averages, they depend on fluctuating exchange rates, and, crucially, housing costs (which often take up a third of our budgets) are not included. Nevertheless, the study confirms what we know already: life is pretty good here. Download the report here. 

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Luxembourg in Figures

Focus 10 - Future manufacturing technologies

FOCUS magazine 9 - Space: Expanding the frontiers of innovation

FOCUS magazine 8 - A green Heart for Logistics

FOCUS magazine 7 – A home for growth

FOCUS magazine 6 - Making materials smarter

FOCUS magazine 5 - Leading the way in ICT security

FOCUS magazine 4 - High hopes for health

FOCUS magazine 3 - Environmental innovators hit the spotlight

FOCUS magazine 2 - A thriving space industry