Why Set Up Business in Luxembourg?

Why Set Up Your Business in Luxembourg?

Bordered by France, Germany, and Belgium, Luxembourg is the small landlocked country located in the heart of Western Europe. The geo-strategic location has positioned Luxembourg as a unique gateway to the European markets and its consumers. In addition to this, the location significance of this country has gained its traction as a preferred location for a wide range of international business and foreign investments.

 

An Overview of Luxembourg’s Economy

Over the years, Luxembourg has seen thriving economic growth due to the country’s dynamic business environment. Luxembourg has proven to be an ideal place for doing business with proactive supports from its pro-business government. The Luxembourg government has rolled out policies and programs to support economic diversification as well as to attract foreign direct investment. Focusing on key innovative industries like logistics, information and communications technology (ICT), health technologies, clean energy technologies, and most recently, space technology and financial services technologies, the Luxembourg government strives to create a good investment climate with high growth potential, balanced macroeconomic foundations, diversified industry, excellent market connectivity, as well as attractive institutional, legislative and fiscal framework.

 

Why Invest in Luxembourg

Luxembourg’s economic competitiveness has indeed attracted many foreign investors into the country. Here is a snapshot of what advantages have investing in Luxembourg.

1. Ideal Gateway to Europe

Luxembourg’s position in the heart of Europe has its geo-strategic significance connecting the rest of Europe by an excellent transportation network, making it easy for people to reach other European countries from their headquarters in Luxembourg.

2. Pro-business Environment

Luxembourg’s advantageous economy has the business-oriented legal, regulatory, and fiscal framework. On top of that, the Luxembourg government has mapped out strategies to attract Foreign Direct investments (FDI) in services sector with  incentives, capital investment subsidies, deferred corporate tax payment schedules, financing of equipment and financial assistance.

3. Political and Social Stability

Another main reason that attracts foreign investors is the political and social stability in the country.

4. Incentives for Investment

In Luxembourg, the government offers lower official basic corporate tax that stands at 21%. Other than that, Luxembourg also has one of the lowest VAT rates in Europe at 15%. Other than reduced tax rates, Luxembourg also offers different incentives to investors, such as government guarantee on loans, loan at low or reduced rates, assistance in development of real estate for setting up industrial sites and buildings, cash grants for investments in high technology sector, research and development of innovative products, industries involved in manufacturing processes and services.

On a final note, Luxembourg is an important financial hub at the heart of Europe with economy spans across different sectors, which include rubber, chemical and other products. On top of that, the manufacturing sector and the services sector (which mainly includes banking and other financial exports) are also the major pillars that supporting the economic growth. In fact, Luxembourg economic performance highlights the promising investment return to foreign investors, and it is definitely one of the popular destinations that welcome foreign investment!