Business in Luxembourg

Entering Luxembourg, a small but prosperous and diverse country, involves understanding its unique business environment and cultural dynamics. Here are some specific considerations for achieving success in Luxembourg:

  1. Multilingual Environment:
    • Language Proficiency: Luxembourg has three official languages—Luxembourgish, French, and German. Being proficient in these languages or having multilingual communication strategies can be beneficial.
  2. Financial Services Hub:
    • Financial Sector: Luxembourg is a major financial services hub. If your business is related to finance, banking, or investment, consider the opportunities available in this sector.
  3. Legal and Regulatory Landscape:
    • Legal Compliance: Understand Luxembourg’s legal framework, which is characterized by a mix of local and international regulations. Seek legal advice to ensure compliance with financial and business laws.
    • EU Regulations: As a member of the European Union, be aware of and adapt to EU regulations that may impact your business operations.
  4. International Business Environment:
    • Global Business Hub: Luxembourg’s strategic location in the heart of Europe makes it an ideal base for international business. Leverage its connectivity and proximity to major European markets.
  5. Diverse Workforce:
    • Cultural Diversity: Luxembourg has a multicultural workforce. Embrace cultural diversity and foster an inclusive workplace environment.
    • Talent Attraction: Attract and retain skilled professionals by offering competitive employment packages and recognizing the importance of work-life balance.
  6. Financial Sector Opportunities:
    • Fintech and Innovation: Explore opportunities in Luxembourg’s thriving fintech sector. The country is supportive of innovation and technology in the financial industry.
  7. Real Estate and Infrastructure:
    • Infrastructure Investments: Be aware of ongoing infrastructure projects and developments, especially in the real estate sector. Luxembourg is continually investing in modernizing its infrastructure.
  8. Networking and Relationship Building:
    • Business Networking: Participate in business events, forums, and networking opportunities to build relationships with local businesses and professionals.
    • Chambers of Commerce: Engage with Luxembourg’s Chambers of Commerce and industry associations to connect with key players in various sectors.
  9. Luxembourg’s Innovation Ecosystem:
    • Research and Development: Explore partnerships with research institutions and universities to tap into Luxembourg’s growing innovation ecosystem.
    • Innovation Grants: Investigate available grants and incentives for research and development activities.
  10. Digital Transformation:
    • Embrace Digitalization: Adopt digital technologies and consider how your business can contribute to or benefit from Luxembourg’s digital transformation initiatives.
  11. Tax Environment:
    • Tax Planning: Leverage Luxembourg’s favorable tax environment. Understand the tax regulations and seek professional advice to optimize your tax planning strategies.
  12. Quality of Services:
    • High-Quality Standards: Luxembourg is known for its high standards of living and quality of services. Reflect these values in your business operations.
  13. Market Expansion Strategies:
    • Expand Beyond Borders: Consider Luxembourg as a launchpad for expanding into neighboring European markets.
  14. Customer-Centric Approach:
    • Client Relationships: In the service-oriented economy, focus on building strong client relationships. Client satisfaction and word-of-mouth referrals are crucial.

Staying informed about market trends, and adapting to Luxembourg’s unique business landscape are crucial for success. Building strong relationships, offering high-quality services, and aligning with the country’s values contribute to a positive business experience in Luxembourg.

​Reach out to us, and we will:

  • Undertake market research on the business climate, customer behavior, market trends, and other factors that are important for the success of your business in Luxembourg
  • Create a business plan for your establishment in Luxembourg
  • Develop a go-to-market strategy for Luxembourg

General information

Capital: Luxembourg

Population: 640,064

Official language: Luxembourgish, German, and English

Main religion: Catholicism

Currency: Euro

Time zone: UTC+1

Economy of Luxembourg

GDP per capita: $133,590

Economic growth: 2%

Unemployment: 4.8%

Inflation: 3.3%

FDI Inflow: $ -9.05 billion

Business in Luxembourg

Popular type of legal entity: Société à responsabilité limitée (SARL)

Minimum number of shareholders for LLP: 1

Terms of company registration: 1-2 weeks

Minimum share capital: €12,000

Restrictions for foreigners to start a business: No

A local director required: No, but at least one director must be appointed who is a resident of the European Economic Area (EEA) or Switzerland

Corporate tax: 25%

VAT: 17% and reduced rates of 8% and 3% for certain goods and services

Benefits and challenges

Benefits: strategic location, stable political environment, favorable tax system, skilled workforce, strong financial sector, and multilingual population

Challenges: high cost of living, limited local market, competition for talent, complex regulatory environment, dependence on external markets, and limited land area for expansion

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