We interviewed experts to explain the growth of Luxembourg and Ireland. Tiny Luxembourg grew to be a European mutual fund hub, fueled by favorable bank secrecy and tax laws as well as its central location. The growth of Ireland (Dublin in particular) on the other hand, was driven by a tax advantage given to management companies and a highly educated labor force. In particular, until recently, fund management companies paid a tax of only 10% on their income (relative to a 32% corporate income tax in Ireland) and they were allowed extra deductions for rental.
