Luxembourg, Singapore agree to exchange tax info

One way small countries like Luxembourg (right) and Singapore can affect climate change is through sustainable finance, said Finance Minister Gramegna, who was here yesterday.
One way small countries like Luxembourg (right) and Singapore can affect climate change is through sustainable finance, said Finance Minister Gramegna, who was here yesterday.PHOTO: REUTERS

Luxembourg is looking to deepen cooperation with Singapore in the areas of "green finance", alternative investment funds and emerging sectors like fintech, the country's finance minister told The Straits Times yesterday.

Mr Pierre Gramegna noted that small, open financial centres like Singapore and Luxembourg have a role to play in promoting sustainable finance, as well as in spreading the message of free trade in the face of rising protectionist sentiment around the world.

Mr Gramegna, who was on a one-day visit here yesterday, metSecond Minister for Finance, Mr Lawrence Wong, to sign a bilateral agreement allowing for the exchange of information in tax matters between the two countries.

This was the first such bilateral agreement for Luxembourg, which previously acted only multilaterally on these matters, Mr Gramegna said. In addition, he met representatives from the Monetary Authority of Singapore as well as some major financial institutions.

There are opportunities for Singapore and Luxembourg to do more together in the financial sector, said Mr Gramegna.

'WORLD CHAMPIONS OF OPENNESS'

We are proof that by being open you can be successful, contrary to what's fashionable today. Protectionism... will end up stifling the economy. That's the common task we have as small, internationally open economies - to work together and spread the message.

MR PIERRE GRAMEGNA, on Singapore and Luxembourg advocating free trade.

One key area of focus is green finance, which refers to financing investments that generate environmental benefits.

Last year, the Luxembourg Stock Exchange became the first exchange globally to introduce a platform for green financial instruments.

Called the Luxembourg Green Exchange, it is a platform for green bonds and other environmentally focused financial instruments.

"One way (small countries like Luxembourg and Singapore) can really make a difference (to climate change) is through sustainable finance," noted Mr Gramegna.

He added that there is also significant scope for collaboration and investment in emerging sectors like fintech or financial technology.

Mr Gramegna said Luxembourg is already a gateway to Europe and could be poised for a bigger role in the wake of Britain's exit from the European Union. Luxembourg's position as a key European financial centre makes it an attractive prospect for firms which have a presence in Britain but also want to maintain access to the European single market, he noted.

These include insurers, asset managers and fintech companies.

For instance, insurance giant AIG has announced it will open a subsidiary in Luxembourg while keeping its main European headquarters in London.

Amid mounting global volatility and rising protectionist sentiment worldwide, Mr Gramegna said Singapore and Luxembourg - "the two world champions of openness" - should continue to advocate free trade.

"We are proof that by being open you can be successful, contrary to what's fashionable today. Protectionism... will end up stifling the economy," he said.

"That's the common task we have as small, internationally open economies - to work together and spread the message."

A version of this article appeared in the print edition of The Straits Times on March 11, 2017, with the headline 'Luxembourg, S'pore agree to exchange tax info'. Print Edition | Subscribe