LUXEMBOURG Law and Practice Contributed by: Anna Gassner, Philipp Mössner, Andrea Carraretto and Etienne Weryha, GSK Stockmann SA
GSK Stockmann SA 44, Avenue John F. Kennedy L-1855 Luxembourg Tel: +352 271 802 29 Fax: +352 271 802 11 Email: Luxembourg@gsk-lux.com Web: www.gsk-lux.com
able energy, real estate, healthcare and life sciences, logistics and supply chain, as well as technology and fintech. Luxembourg is a leading financial and tech hub for innovation in financial technology. The coun - try’s strategic support for the space technology sector has also attracted numerous private space companies and tech firms. This increase in JV activity can be attributed to the factors described in 1.1 Geopolitical and Economic Factors , particularly the stable but very flexible legal environment of the Grand-Duchy of Luxembourg. JVs are not legally defined under Luxembourg laws. A JV is an arrangement between at least two par - ties reflecting their willingness to share a venture, for either joint commercial or joint investment purposes, by gathering their resources and sharing the risks implied by the project. While JVs in Luxembourg are not required to take any prescribed legal form, they are generally structured in two ways. The first is the corporate JV – which in most cases involves the incorporation of a separate JV vehicle by the participants (should an operational company not already have been incorporated by one participant in the JV). The second is the contractual JV, which is based on a single contractual arrange - ment whereby the participants define the scope of their collaboration and their respective rights and obli - gations. 2. JV Structure and Strategy 2.1 Typical JV Structures
1. Market Conditions 1.1 Geopolitical and Economic Factors While it would be inaccurate to claim that inflation, interest rate fluctuations, geopolitical tensions like the war in Ukraine, ongoing Middle Eastern conflicts, resurgence of US political unpredictability, or shifting market demands have not impacted Luxembourg- based joint ventures, the jurisdiction remains appeal - ing for JV structuring. This is largely due to its political and economic stability, as well as its reliable, busi - ness-friendly, and flexible legal framework. In recent years, family offices have increasingly invest - ed alongside commercial partners or institutional investors, such as private equity firms, through joint ventures. These JVs are frequently used to acquire assets located outside Luxembourg, with the involved parties often situated internationally. Luxembourg serves as a compromise, a “safe haven”, for incor - porating the holding structure that will ultimately own assets across the EU or even globally. The trend in these segments clearly leans towards controlling and sharing both financial and corporate risks while ensuring the distribution of profits to co- investors. In uncertain times, JVs have proved to be a strategic option for parties to pool resources and expertise, leveraging their combined strengths, funds, and shared risks to pursue specific projects or oppor - tunities. 1.2 Industry Trends and Emerging Technologies In Luxembourg, several sectors have seen height - ened JV activity, notably financial services, renew -
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