Invest in Luxembourg

Luxembourg, officially known as the Grand Duchy of Luxembourg, is the smallest member nation in the European Union. It is completely landlocked and is surrounded by some of the major economies of the European Union: France, Belgium and Germany. This strategic position of the country has really worked in its favour as many people are now viewing this small nation with the point of view of being a safe haven for investment.

Though small in size, it has the highest standards of living and has a record of registering a steady economic growth in the past two decades. The main essence of Luxembourg is its perfect macro-economic environment which is conducive to do business in the country. Its moderate growth rate, low inflation rates and low levels of unemployment really make it one of the most favoured destinations for foreign investments.

This sustainable economic growth of Luxembourg has been mainly due to its gifted natural resources and world-class infrastructure. The country has a good blending of natural resources and infrastructure. Luxembourg has huge reserves of iron-ore and timber. The Grand Duchy of Luxembourg also has a wonderful and massive infrastructure. It has a well established rail, road and air transport. Apart from this, it also has an excellent power supply system and communications network.


According to the World Bank and the International Monetary Fund, Luxembourg has the highest GDP per capita in the entire world. The capital city of Luxembourg, the Luxembourg City is the largest city and is also a seat of variety of agencies and institutions of the European Union. It also has one of the diverse, qualified and multi-lingual labour market out of which many are cross-border commuter workers. This has also been a major driving force for foreign investors to set-up businesses in Luxembourg. If this is not enough then Luxembourg is also home to European Investment Bank which is a financial institution of the European Union.


After experiencing unprecedented shocks as a result of the global economic crisis, Luxembourg is back on track and is showing an upward growth trend. The Real GDP of Luxembourg is expected to grow at a rate of 2% in 2010 whereas in 2011, it is expected to grow at a rate of 2.4 per cent.

Market Size:

With the figures of population of Luxembourg now standing at half a million, it is really one of the emerging markets in the European Union. By setting up a business in Luxembourg you will not only be able to tap the market of Luxembourg but can also have access to some of the largest markets of European Union such as France, Belgium and Germany.

Growth figures and FDI figures:

Since 1995-2010, Luxembourg has registered a steady economic growth with an average growth rate of 1.05% on a quarterly basis. The current value of Foreign Direct Investment (FDI) in Luxembourg of US alone accounts for $1.5 billion, which is in fact the largest US direct investment outside of North America.

Key investment areas to invest in Luxembourg:

Though the iron and steel industry played a major role in boosting the economic growth of Luxembourg, the economy of Luxembourg has now undergone a drastic change and it has now become one of the largest service oriented economies in the world having one of the biggest financial centres. The five thriving sectors in Luxembourg include steel, television and radio broadcasting, financial services, cargo shipping and satellite transmission. Some of the other sectors in which there are huge prospects for foreign investment in Luxembourg include, Biotechnology/Health technologies, Eco-technologies, Logistics and E-commerce.

FDI/Investment policy:

Luxembourg has undertaken lots of measures to encourage foreign investment, both from small companies as well as large companies, since the end of World War II. Luxembourg now offers a favourable environment to foreign investors. Almost all the governments in Luxembourg have always understood the importance of foreign investment in a country and have done everything possible to attract new investment in industries of all sizes and shapes. The government of Luxembourg has abolished the capital duty tax and has also lowered the official basic corporate tax.

Special incentives offered by government of Luxembourg to attract foreign investment:

The government of Luxembourg offers lots of incentives to foreign investors. These incentives are in the form of credit assistance, tax rebates for foreign investors who wish to set up companies in Luxembourg. There are also other incentives such as investment tax credits, venture capital investment certificates, regional and national incentives, R&D incentives and even environmental incentives. The government of Luxembourg is so dedicated towards encouraging foreign investment in the country that it offers a custom-made incentive program to international investors and provides an easy access to bureaucrats.


To encourage foreign investors and to bring huge investment in the country, the government of Luxembourg has set up an agency known as the Board of Economic Development. This agency provides all sorts of support to investors and helps them to analyze and evaluate the investment opportunities that are available in the country. This agency guides investors through every step of the investment process and provides accurate, immediate investment related information relevant to a particular business.

A sustainable economic growth, an investor-friendly government, massive infrastructure and abundant natural resources, all these features really make the country of Luxembourg a nation which is worth investing especially for people who want to establish their base in the Western Europe.


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