Dublin and Luxembourg are currently the two leading domiciles for funds in Europe, much as Delaware is in the U.S. They offer incredibly favorable tax rates, prestige, experience, geographic location and a skilled, English-speaking labor force. But many believe cheaper labor costs and equally favorable taxation could allow another country to gain prominence in the field.

Luxembourg and Dublin are operating from clear positions of strength, most notably in terms of taxes. Sean Cook, managing director of Brown Brothers Harriman in Luxembourg, said the nation's corporate taxation has been as low as 8% in the past couple of years.

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