Luxembourg Ambassador to Korea Jacques Flies meets with Seo Yoo-seok, chairman of the Korea Financial Investment Association in Seoul, Wednesday. Courtesy of the Korea Financial Investment Association

The chairman of the Korea Financial Investment Association (KOFIA), Seo Yoo-seok, met with Luxembourg Ambassador to Korea Jacques Flies and Luxembourg for Finance delegation to discuss expanding financial investment cooperation, the association said Wednesday.

Despite its small size, Luxembourg has cemented itself as a major global financial hub, attracting banks, investment funds and multinational corporations due to its business-friendly regulations, strategic location and economic stability.

Nestled in the heart of Europe, Luxembourg provides easy access to key financial markets, including Germany, France and Belgium. The country has consistently ranked among the wealthiest nations per capita, bolstered by a strong GDP and a diversified economy.

The meeting marked the first official visit since the opening of the Luxembourg Embassy in Seoul in December 2023.

"As the world's leading international financial hub in the cross-border fund market, Luxembourg offers an optimal business environment for Korean financial investment firms," Flies said during the meeting, according to KOFIA.

The ambassador emphasized that Korean financial institutions could secure broader opportunities in the global market by leveraging Luxembourg's tax policies and extensive fund network.

Seo highlighted Luxembourg's strengths as a world-class asset management hub, citing its stable and flexible financial system, tax benefits and expertise in cross-border fund management.

Luxembourg hosts more than 120 international banks, making it a major player in global finance. The nation's banking secrecy laws, once a key draw, have evolved to align with international transparency standards, yet Luxembourg remains attractive due to its tax policies, skilled workforce and multilingual business environment. In addition, the country is the second-largest investment fund center globally, after the United States, managing over $5.6 trillion in assets.

"We will actively support domestic financial institutions in utilizing Luxembourg's advantages to explore new funding channels," Seo said, adding that KOFIA aims to collaborate with the Luxembourg Embassy in Seoul to help Korea grow into a global asset management hub in Asia.

KOFIA has steadily expanded its ties with Luxembourg in recent years. In 2019, it organized a delegation of Korean asset management firms to visit Luxembourg, where they discussed regulatory and service improvements for cross-border fund transactions. In February 2023, KOFIA met with Luxembourg's finance minister to explore investment cooperation.

Korea has been seeking to strengthen partnerships with major financial hubs as part of its efforts to expand the global reach of its financial industry.