Gilles Roth: "Luxembourg is poised to become the digital benchmark of financial Europe"

In an interview with Paperjam.lu, Luxembourg Finance Minister Gilles Roth outlined the strategic course the country is taking in the face of technological transformation and geopolitical challenges. His position is unambiguous: this is a moment of opportunity, and Luxembourg intends to be not just a player, but a pioneer.

Among the changes already implemented, Roth highlights the modernisation of the expat regime: 50% exemption from tax on income up to €400,000 per year. This mechanism is particularly valued by start-ups, for which it allows them to attract international staff. The abolition of the subscription tax for ETF funds and a 1% reduction in corporate tax have also strengthened the country's competitiveness.

But perhaps most significant was the legislative framework for blockchain and cryptocurrencies, including the adaptation of the European MiCA directive. This gave Luxembourg regulatory flexibility and investor protection.

The government is also working on introducing a tax credit for business angels and creating an attractive regime for stock options - employee equity participation in startups. According to the minister, this will ensure favourable taxation of capital gains and increase motivation at the early stages of projects.

One of the key innovations was a carried interest regime aimed at attracting fund managers. This is an important step in an increasingly competitive European environment, especially after the transformations in the UK and Southern Europe.

At the same time, Roth announced the launch of Peak Accelerator, a new platform funded by the Ministry of Finance to support startups developing digital solutions for the fund industry. The goal: full digitalisation of the fund ecosystem. The accelerator will bring together startups, asset managers and technology companies.

Another important element is the AI and Fintech Conference in 2026, where the government's strategy for integrating AI into the financial sector will be presented. Preparations are already underway, with the Luxembourg House of Financial Technology setting up an AI Experience Centre, which will work in conjunction with the AI Factory programme.

Roth noted that Luxembourg was the first country in the eurozone to issue a digital treasury certificate, reducing transaction times, increasing transparency and reliability for investors. In the future, the treasury plans to move towards issuing a digital budget, cementing its role as a leader in digital public administration.

Against the background of the EU's thinking on deepening the capital union, the Minister emphasises that the flexibility, the efficiency of the CSSF regulator and the responsiveness of the Luxembourg parliament allow the country to remain first mover in adapting European legislation. Together with France and Spain, Luxembourg is already working on mechanisms to channel savings into investments, especially in SMEs, which will be supported by new pension savings schemes.

The minister hinted at future tax breaks for private pension schemes (the third pillar), but stressed that they would not replace the mandatory public system, which requires updating for sustainability.

In response to questions about the EU's attempts to centralise financial supervision, Roth said that Luxembourg supports harmonisation through convergence of practices, but is against the creation of a single supervisory body. He emphasised that the CSSF does an excellent job of supervising even complex structures. But the real threat to competitiveness is the bureaucracy of Brussels, and here Luxembourg will be the "voice of reason".