Import regulations and customs duties
Since the first of January 1993, the European Union, of which Luxembourg is part, has been a single market, without any customs barriers, which ensures free circulation of the goods. On May, 1st of 2004, ten "candidate countries" became new members of the European Union: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia. Trade within the European Union is totally free from customs duties, provided that the country of origin of the goods is one of the 25 European Union Member States. Nevertheless, when introducing goods into Luxembourg, exporters shall fill in an intrastat declaration.
When the country of origin of the goods which are exported to Luxembourg is not part of the European Union, customs duties are calculated Ad valorem on the CIF value of the goods, in accordance with the Common Customs Tariff (CCT).
The duties for non-European countries are relatively low, especially for manufactured goods (4.2% on average for the general rate), however textile, clothing items (high duties and quota system) and food-processing industry sectors (average duties of a 17.3% and numerous tariff quotas, PAC) still know protective measures.
In order to get exhaustive regulations and customs tariffs rates regarding their products, exporters shall refer to the TARIC code and its database, which includes all applicable customs duties and customs trade policy measures for all the goods.
Moreover, many bilateral and multilateral agreements have been signed by the European Union, in order to define specific customs duties with the following countries:
- Custom agreements with Australia, Canada, United States, Mexico and South Korea.
- The EU-EFTA (European Free Trade Association) Agreement was signed in 1972 with Iceland, Liechtenstein, Norway and Switzerland.
- Free trade agreements with Bulgaria and Romania that hope joining the European Union in 2007.
- Mediterranean Agreements, concerning: Turkey, Israel, Jordan, Morocco, Palestinian Authority, Tunisia, Egypt, Lebanon and Syria.
- The ACP agreements, with 95% of the tariff lines with a rate of a 0% for developing countries in Africa, the Caribbean Islands and Pacific. The Cotonou Agreement, signed in the year 2000, defines the new EU-ACP partnership.
- The Generalised System of Preferences (GSP): 54% of the tariff lines are at 0% for developing countries outside the ACP framework.
To get an exhaustive list of the foreign trade agreements of the European Union, click here.
>> To get further information on customs policies in the European Union, please check the exhaustive report by the European Commission.
Excise duties are also levied on certain products, especially on spirit.
>> To get further information on VAT rates in Luxembourg, please check the list of VAT rates applied within the European Union, as well as the Government web site.
>> More detailed information on excise duties is available concerning alcoholic beverages, tobacco products, energy products on the European Commission website.
The Grand Duchy of Luxembourg is considered amongst the elite class of the European Union due to its balanced budget, its low rate of unemployment, and its GDP growth. In 2004, its GDP reached 31.1 billion dollars with a per capita GDP of 47,926 dollars, the highest in the world. Thus, the Luxembourg consumer is ready to pay for expensive products provided he gets good quality.
The Business to Consumer (B to C) market
The importance of general trade (retail, wholesale, automobile sales and repair ) has been on the decline since 1985. Trade represented 12.2% of the total value-added economy of the country in 1985, as against only 9.5% in 2001.
The distribution market in Luxembourg is concentrated around 4 big groups:
- the national group Cactus , leader in the distribution sector in Luxembourg and owns 12 stores throughout the country.
- the group Louis Delhaize, which is the 2nd largest player in the country’s distribution system. It has stores such as Cora, Match and Smatch. The group Louis Delhaize is not to be confused with the Delhaize le Lion group which is of Belgian origin and has been in Luxembourg under the eponymous name Delhaize. This company achieved a turnover of 18.8 billion euros worldwide in 2005.
- the group Monopol with 9 stores in Luxembourg.
- the Auchan group, with 1 hypermarket employing 650 people in 2004.
These 4 groups share together this market of 455,000 inhabitants. The purchasing power of the people of Luxembourg being the highest in the world (source: Report-2000 of the Union of Swiss Banks), the distribution sector benefits from high per capita spending which is 70% higher than those of the neighbouring Belgians and Dutch. Distributors are trying to meet the demanding needs of the people of Luxembourg; for example by selling high-end perfumes in supermarkets.
The Business to Business (B to B) market
Transportation of goods
The body of standardisation and certification in Luxembourg is the Service of the Energy of the State (SEE). Luxembourg is a member of the European Committee of Standardisation (CEN), the European Committee of Electronic Standardisation (CENELEC), the European Institute of Standardisation of Telecommunication (ETSI), the International Organization of Standardization (ISO) and the Committee(commission) International Electrotechnics.
Patents and brands
The body in charge of the protection of intellectual property in Luxembourg is the Service of the Intellectual property of the Ministry of the Economy.