The new Memorandum of Understanding between Guernsey and Luxembourg reinforces the positioning of both locations as major fund locations, says Ogier Luxembourg partner Francois Pfister.

His Guernsey counterpart, Ogier practice partner Marcus Leese, confirmed the MoU was extremely welcome news. 

Ogier is the only Channel Island law firm with a Luxembourg capability.

Mr Leese said: ‘Over the past several years we have seen significant and increasing use of structures involving both Guernsey and Luxembourg vehicles – notably for private equity, real estate and infrastructure transactions. 

‘Advising on and assisting clients with such structures was the principal driver for Ogier to establish our Luxembourg office over three years ago. The regulatory co-operation, support and recognition embodied in the memorandum of understanding can only be positive and supportive for the continued development of this very successful trend.

As part of an ongoing programme of expansion of its coverage of its network of supervisory and regulatory cooperation agreements, the Guernsey Financial Services Commission recently signed a Memorandum of Understanding with the Commission de Surveillance du Secteur Financier of Luxembourg, which provides a framework for enhanced cooperation between the two supervisory authorities.

As an EU member, Luxembourg "works a bit like a translation system between legal systems", says Francois Pfister in this week’s Legal Week. Part of the attraction of Luxembourg, where Ogier opened its full-service, business law practice in 2012, is the ability to comply with European regulations quickly, due to ‘relatively small and swift’ political and economic communities.

Private equity specialist Mr Pfister says that, for example, ‘in Luxembourg we implemented the EU's Alternative Investment Fund Managers Directive (AIFMD) very quickly, which was strategic for us as the number two jurisdiction in the world for investment funds’.

Legal Week reports Francois’ view that offshore jurisdictions and the lawyers based in them provide investment structuring that renders them ideal for international clients – predominantly US and Asian – who wish to invest in Europe via a flexible, tax-efficient jurisdiction. "If you have 10 or 15 investors based in different jurisdictions in Asia, they may need to have a common platform that satisfies their needs."