Ireland vs Luxembourg: The key differences when domiciling ETFs

Ireland houses over three times the assets under management than Luxembourg due to its powerful tax benefits, however, the two domiciles also differ on regulatory and operational fronts

Theo Andrew

Ireland v lux

Ireland’s dominance over Luxembourg in ETFs has steadily grown over the past few years as the powerful withholding tax advantage on US equities has propelled assets domiciled in the region to over $1trn.

While tax is certainly the main differentiator between the two domiciles, and despite Luxembourg also having a favourable tax benefit for ETFs, the two regions have other fundamental differences in their regulatory and operational approach to housing the ETF wrapper.

The Double Taxation Treaty with the US – which sees ETFs with US equity exposure are subject to a 15% rather than 30% withholding tax on dividends – has driven assets and also led both Amundi and BNP Paribas Asset Management (BNPP AM) to...

This article first appeared in ETF Insider, ETF Stream's monthly ETF magazine for professional investors in Europe. To read the full article, click here.


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