MUMBAI (TIP): Luxembourg, the small European nation, has offered Indian companies a favourable investment climate to tap the European Union’s markets effectively. Gaston Stronck, Luxembourg Ambassador to India, said the country has the most efficient processes in place to set up a new company.
In fact, he said, with all the required papers in place and a clear intention, one could get the clearance for setting up a company in just 48 hours. Among European countries, Luxembourg has the lowest corporate tax rate of 29 per cent and has halved the value added tax to 5.7 per cent for corporates that register their intellectual property rights there. It also exempts Value Added Tax (VAT) on commodities at the entry point. Companies can set up warehouses in Luxembourg and pay VAT when goods are moved out of the country. On the potential investment from Luxembourg in India, Stronck said the country’s assets under management total 2,225 billion of which only 45 billion is invested in India.
More reforms like the recent Government measure to allow foreign direct investment in retail could improve the flow of investments into India, he said. Global depository receipts of 150 Indian companies are already traded on the Luxembourg Stock Exchange.
In the manufacturing sector, the country has much to offer as it is considered the pioneer in steel making technology and houses the largest steel manufacturing company, Arcelor Mittal. Luxembourg has managed to register GDP growth of two per cent despite the slowdown in economic activity due to the ongoing euro crisis, said Stronck. “We have managed to beat the economic slowdown in other European nations as our country is more aligned to Germany which has been the bright spot amongst the European economy,” he said. Hoping the free trade agreement with India would be signed by the end of this year, Stronck said it would be a comprehensive and competitive and would benefit both countries.