Other European competitors

Luxembourg and the fund industry

Within Europe, Zurich competes with several centres that are smaller than London but enjoy an advantage that Switzerland lacks: full access to the internal market of the European Union. Luxembourg is the most important of them for asset management. Its undertakings for collective investment held net assets of about EUR 5.95 trillion at the end of August 2025, spread over 3,079 entities and more than 13,000 sub-funds.¹ Many Swiss asset managers distribute their funds in Europe through Luxembourg vehicles, either as delegated portfolio managers or as advisers to a Luxembourg management company. The chapter on asset management in Part H shows how the Swiss Limited Qualified Investor Fund, in force since March 2024, was designed to bring part of this business back to Switzerland. It has not changed the basic fact that a fund intended for European investors is still more easily set up in Luxembourg or Dublin than in Zurich.

Luxembourg also competes with Zurich in private banking for European clients, in insurance wrappers for wealthy families and in the booking of cross-border business with the European Union. Its GFCI rank, seventeenth in September 2026, places it only a few places behind Zurich and Geneva.² What distinguishes it from Zurich is a structure built around the European passport. Its strength depends on European law, whereas Zurich’s strength depends on its own institutions and on the confidence of clients from outside Europe.

Frankfurt, Amsterdam and Paris

Frankfurt is the seat of the European Central Bank, of the Single Supervisory Mechanism and, since 2024, of the European Anti-Money Laundering Authority (AMLA). The authority was legally established on 26 June 2024, has its seat in the MesseTurm and will begin the direct supervision of about forty selected financial institutions in 2028, when it expects to have about 430 staff.³ The decision strengthens Frankfurt as the regulatory capital of the euro area. In the GFCI, however, Frankfurt fell to twenty-ninth place in September 2026, fourteen places lower than in March.⁴ For German clients, Frankfurt is the domestic financial centre, while Zurich remains the foreign centre of trust. The chapters of Part K describe this relationship in detail. The competition between the two cities concerns institutional business, asset management and capital markets more than private wealth, where Zurich’s advantage remains large.

Amsterdam gained a large share of European equity trading after Brexit, because European rules required trading in euro-denominated shares to take place within the Union.⁵ Paris attracted investment banking staff and the European Banking Authority. Neither city competes directly with Zurich in cross-border private banking, although Paris has built a significant presence in asset management and private equity. Their relevance for Zurich lies mainly in the competition for highly qualified personnel and for the European headquarters of international firms.

Milan and the flat tax

Italy has become an unexpected competitor for wealthy individuals through its flat tax for new residents under Article 24-bis of the Italian income tax code. The regime allows individuals who transfer their tax residence to Italy to pay a fixed annual substitute tax on their foreign income. The amount has risen sharply since the regime was introduced.⁶ For individuals transferring their civil residence after 31 December 2025, it rose from EUR 200,000 to EUR 300,000 for the main taxpayer and from EUR 25,000 to EUR 50,000 for each family member.⁷ The regime has drawn wealthy families, many of them leaving London, to Milan and to the lakes of Lombardy. Its popularity illustrates a broader point. The lump-sum taxation of Switzerland, which Part H describes, was for many decades a model that other countries imitated. Italy, Greece and Portugal have introduced their own regimes for wealthy newcomers in recent years, so that the competition for wealthy residents has become a competition among tax systems as much as among financial centres. The GFCI rank of Milan, sixty-second in September 2026, shows that a tax regime for individuals does not by itself create a financial centre.⁸ Assets of new Milanese residents are often managed in Switzerland, and Lugano, Zurich and Geneva benefit from the proximity.

Liechtenstein

Liechtenstein occupies a special position among Zurich’s competitors, because it is at the same time a partner in the Swiss customs and currency area and a member of the European Economic Area since 1995. Its banks managed client assets of CHF 503.7 billion at the end of 2024 on a consolidated basis, including foreign group companies. The principality counted eleven licensed banks, a fund sector with CHF 117.8 billion in 840 funds and thirty-two insurance companies.⁹ The chapter on the DACH market in Part K describes how Liechtenstein banks, trust companies and insurers use the EEA passport to serve clients in Germany and Austria and how Swiss groups use Liechtenstein subsidiaries for the same purpose. For Zurich, Liechtenstein therefore works largely as an extension of its own market, since it gives Swiss-franc-based wealth management a door into the European market that Switzerland itself does not have.

Notes

1. Chronicle.lu, “Net Assets of Luxembourg UCIs Rise to €5.95trn in August 2025”, https://www.chronicle.lu/category/fund-asset-management/57151-net-assets-of-luxembourg-ucis-rise-to-eur5-95trn-in-august-2025, reporting figures of the Commission de Surveillance du Secteur Financier (CSSF). ↩
2. GFCI 40 (n. above), rankings table. ↩
3. European Anti-Money Laundering Authority, “About AMLA”, https://www.amla.europa.eu/about-amla_en. The selection of the directly supervised entities is to take place during 2027. ↩
4. GFCI 40 (n. above), Western Europe commentary, describing Frankfurt as the centre with the steepest decline in the region. ↩
5. The shift of euro-denominated share trading from London to Amsterdam in January 2021 is widely documented in the financial press. ↩
6. Art. 24-bis TUIR was introduced by Law No. 232 of 11 December 2016 (budget law for 2017). Its paragraph 2 was amended by Decree-Law No. 113/2024, converted by Law No. 143/2024, for individuals transferring their residence after the decree’s entry into force: Brocardi.it, “Art. 24-bis TUIR”, https://www.brocardi.it/testo-unico-imposte-redditi/titolo-i/capo-i/art24bis.html. The amount in force before 2026 was EUR 200,000: DWF (n. below). ↩
7. DWF, “2026 Budget Law: key tax changes”, January 2026, https://dwfgroup.com/en-ie/news-and-insights/insights/2026/1/2026-budget-law-key-tax-changes. ↩
8. GFCI 40 (n. above), rankings table. ↩
9. Finanzmarktaufsicht Liechtenstein (FMA), Finanzplatz Liechtenstein, edition 2025, https://www.fma-li.li/fma-li/documents/publikationen/finanzplatz-liechtenstein/fma-broschuere-finanzplatz-liechtenstein-2025.pdf. The brochure emphasises the combination of free provision of services within the EEA with preferred access to Switzerland through the customs treaty and the use of the Swiss franc. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.