Luxembourg: Investing

FDI in Figures

Despite the current economic crisis, Luxembourg shows the highest rate of foreign investment in Europe. More than three-fourths of the FDI received by Luxembourg comes from the countries of the European Union. In terms of distribution, the banking and insurance sectors get most of the FDI.

The government of Luxembourg has established some measures in order to make the country even more attractive to FDI.  These measures present fiscal benefits and also include advantages in the equipment and construction fields.

Why You Should Choose to Invest in Luxembourg

Strong Points

Incoming foreign investment is made easy by the policy established by the authorities. In effect, Luxembourg is one of the most open economies in the world, and has a very attractive taxation system. Luxembourg is also one of the biggest financial centers of the European Union (155 banking establishments). There are minimal exchange controls and foreign capital circulates freely. Additionally, communication networks are extremely developed and connect the country to the main foreign cities and capitals (highways, plane and train), and the labor force is highly qualified.

Weak Points

The main hindrance to investment in Luxembourg is in the high cost of living and high level of consumer demands.

Government Measures to Motivate or Restrict FDI

The government took a number of measures to attract business establishment:
- Subsidies granted to SMEs (retail, restauration or hotels) through the National Society of Investment Credit (SNCI);
- Up to 25% exemptions from Corporate Income Tax and Commercial Tax, for 8 years, for start-ups.

Procedures Relative to Foreign Investment

Freedom of Establishment

Yes

Acquisition of Holdings

A majority holding interest in the capital of a local company is legal in Luxembourg.

Obligation to Declare

Whatever may be the form of investments chosen (momentary commercial association, Economic Interest Grouping - EIG, an independent agent's activity or a branch), access to an economic profit-making activity on the Luxembourg territory is subject to:

1) the same formalities (registration/enrollment at the Companies' Trade Register, application for a VTA number, initial declaration at the Direct Taxes Administration, etc.)

2) the same obligations (obtaining an establishment authorisation for commercial activities, crafts, industrial activities and liberal professions) as in the case of a creation of an entreprise in Luxembourg.

Competent Organization For the Declaration

Companies' and Trade Register
Direct Taxes Administration

Investment Opportunities

Investment Aid Agency

Economic Development Agency (DELUX)

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Luxembourg
Globaltenders, Tenders & Projects from Luxembourg
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

Other Useful Resources

Doing business in Luxembourg

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