Iran-Luxembourg Relations in a Changing World

Business & Markets Desk
Iran-Luxembourg Relations in a Changing WorldIran-Luxembourg Relations in a Changing World
With a well-earned reputation in insurance and finance, especially Islamic finance, Luxembourg can play a key role in Iran’s reconnection with international business

There is a small duchy at the heart of Europe, with a reputation of being an open business place with a knack for innovation.

Luxembourg, one of the founding members of European Union, has always punched above its weight, economically.

Recently it faced a grave question: How will Brexit impact its economy? The UK is Luxembourg’s largest financial services export destination and its exit from the Union can either create an influx of financial firms that want to relocate to the duchy, or damage Luxembourg’s economy due to less business from the City. All this has not shaken the country’s focus on an emerging opportunity in the Middle East.

After a visit by an Iranian delegation in October 2014, the Luxembourgians have now come to Tehran, searching for business opportunities. A 40-strong delegation led by Economy Minister and Deputy Prime Minister Etienne Schneider is here. The delegation held a seminar dubbed "Iran-Luxembourg: Partners in a Changing World" with their Iranian counterparts on Tuesday.

With a well-earned reputation in insurance and finance, especially Islamic finance, and being a stone's throw away from London, Paris and Frankfurt, the country can play a key role in Iran’s reconnection with international business. This is while banking has become the bottleneck in doing business with Iran, due to US limitations on processing dollars for Iran.

“Moving money through banks is our main challenge,” said Mehrdad Golshannejad, chief executive of Tenergy, a petroleum trading company, who has been approached by companies from Luxembourg.

“Don’t underestimate the challenges of the banking system,” said Maxim Strauss, CFO of Cargolux International Airlines, who despite problems with placing calls and getting a timely response to emails from Iranian businessmen, has Iran in his crosshairs and is partnering up with state carrier Iran Air. Cargolux was present in Iran from 2001 to 2007 and is resuming ties.

Luxembourg is more than a financial center, Schneider insists; it is a business friendly hub for innovation, a breeding ground for startups with a strategic location in Europe. He is avidly following Iran’s startup scene and the likes of DigiKala, an online Iranian retailer.  

Carlo Thelen, the head of Luxembourg’s chamber of commerce, is quite optimistic about the prospects. He sees much interest from his side, given the size of the delegation.

There are cultural differences that need to be bridged and a deceiving first impression of Iran that needs to be shaken, according to Gilles Klien of OS Consult that dabbles in firefighting equipment. But Iran is filled with opportunities.

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