Blackstone picks Luxembourg for EU base: Luxembourg official says

LONDON (Reuters) - Private equity firm Blackstone (BX.N) is among a number of financial services companies to have chosen Luxembourg as the site for a European Union subsidiary following Britain's vote to leave the EU, the head of Luxembourg's financial development agency said

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LONDON (Reuters) - Private equity firm Blackstone (BX.N) is among a number of financial services companies to have chosen Luxembourg as the site for a European Union subsidiary following Britain's vote to leave the EU, the head of Luxembourg's financial development agency said.

Blackstone is among three or four private equity firms that have picked Luxembourg over larger rival European financial centers, Luxembourg for Finance chief executive Nicolas Mackel told Reuters by phone on Monday.

"That's what (Blackstone) told us in December already," he said, adding he could not name the other firms, as they had not yet made their decisions public.

Blackstone, which currently uses so-called "passporting" arrangements to offer its services across the European Union from its European base in London, declined to comment.

Firms without regulated EU operations outside Britain say they are working on the assumption of a "hard Brexit", where they will no longer be able to sell their services across the EU without an operation regulated by an EU member country.

Mackel's comments come after U.S. insurer AIG (AIG.N) said last week it would set up an EU subsidiary in Luxembourg, the largest financial services firm so far to set out details of its EU hub.

Dublin, Frankfurt and Paris are among other centers touting themselves as an alternative base for firms wishing to retain access to the EU once Britain departs.

Mackel said one bank had also made a decision to set up in Luxembourg, while 10 to 20 were planning to expand existing operations. Mackel declined to name the bank.

He said four or five "big name" asset managers were also planning to set up operations in Luxembourg, following Prudential (PRU.L) asset management arm M&G's recent decision to do so.

Five to 10 so-called "fintech" companies had already chosen Luxembourg, Mackel said, while three to four insurance companies were close to doing so, with Lloyd's of London also due to make a decision soon.

Lloyd's of London, the world's largest specialty insurance market, has said it will pick its EU location by the end of March. Luxembourg is one of its options.

Insurer Hiscox (HSX.L) has also said it is choosing between Luxembourg and Malta, while UK-regulated ship insurers are looking at a number of countries, including Luxembourg and Cyprus.

Luxembourg has been in talks with some of the ship insurers, Mackel said.

Most of the financial services firms who had not yet made decisions would likely do so "if not by the end of Q1 then at least by the end of H1", he said.

(Reporting by Carolyn Cohn and Dasha Afanasieva; Editing by Keith Weir)

Tanel Feldman

Senior Partner , Immigration Law Associates

Immigration Law Associates provides in-depth advice on rights and obligations triggered by the cross-border element of a given legal situation. Our know-how is built on an extensive experience in EU law and is supported by a network of partners across the EU. Social security coordination : • Autonomous application of the social security coordination regulations and ECJ case-law, to any situation involves a cross-border element EU Company law : • Establishment -permanent activities • Establishment -self-employment activities International Private Law : • Law applicable to the employment relationship Labour and employment law : • Freedom of movement of workers-equal treatment, access to social benefits • Employment contracts and termination of employment • Working conditions • Employee benefits • Transfer of undertakings • Authorisations of work for third-country nationals Special regimes : • Posted workers • Frontier workers • Highly mobile workers • Employment of record • Intra-EU mobility of third-country nationals

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