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Luxembourg minister hopeful of a treaty

india Updated: Jan 24, 2007 23:37 IST
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Luc Frieden, minister of treasury and justice, Luxembourg is on a promotion mission in India and is hopeful of a treaty of double taxation avoidance in the next six months.

"We would be talking to the Indian finance minister and hope this will help not only investments and companies from Luxembourg but also Indian companies exporting to our region," he said.

Currently it is estimated that 15 per cent of FII investments in the Indian stock markets come from funds registered in Luxembourg and they expect a substantial increase in numbers with the tax treaty in place. The delegation is also keen to bring funds into he infrastructure sector in the country.

"India gets into bilateral agreements with various countries from time to time. But what India should make sure is the resident status of the companies in the country where they are registered," says Akhil Hirani, managing partner at Majumdar & Co.

Reacting to reports on easing of visa restrictions for Indian IT professionals, the minister only said: "We welcome legal immigration of not just IT professionals, but also professionals from other fields."

The India success story has made Luxembourg put in renewed efforts to attract attention of Indian business to look at it not only as a place to list their shares but as a leading financial centre of the world.

"There are 150 foreign banks in Luxembourg. If Indian banks do not use the opportunity to open up in Luxembourg they are losing out on a great opportunity," said Frieden. Talking about the Arcelor Mittal deal, he said that there was no objection from the government to the deal based on the nationality but they were only upset by the surprise element of the hostile takeover.

"The deal showed us the richness and dynamism of Indian business. Our interest was to keep the investments within the country and we are glad Mittal would be moving its headquarters to Luxembourg," he added.

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