2. Luxembourg
Luxembourg is a tiny European country,
bordered by Belgium, France and Germany.
• Capital: Luxembourg City
• Population: 556 726 (2016)World Bank
• Currency: Euro
• King: Henri, Grand Duke of Luxembourg
• Official languages: German, French,
Luxembourgish
• GDP 2015 estimate
Total-$57.9 billion (71st) Per capita -
$103,187 (3rd)
- HDI (2014) 0.892 (very high) · 19th
3. Luxembourg
Economy
Over the past five years, Luxembourg’s
economy has evolved significantly,
through greater sectorial diversification
and openness in both regulations and
foreign direct investment opportunities
For decades, international businesses have
chosen Luxembourg to base their operations.
The pro-business environment and supporting
policies implemented by the Luxembourg
government have greatly benefited the
international popularity of Luxembourg as an
investment location.
4. Luxembourg
Attractions
●Solid workforce
●Stable political climate
●Transparent and firm
regulatory framework
●Exceptional quality of life
●Minimum taxation
The country has a strong and stable
economy, and its GDP per capita consistently
ranks among the highest in the world.
Luxembourg is widely known for its major
international financial centre.There are no
major sectors in Luxembourg in which
foreign investors are denied national
treatment. Bureaucratic procedures,
including those for licenses and permits, are
sufficiently streamlined and transparent.
Foreign investors are allowed to participate
equally in ongoing privatization programs,
and the bidding process is transparent with
no barriers erected against foreign investors
at the time of the initial investment or after
the investment is made.
5. FDI The Luxembourg government actively seeks
foreign investment, and there are no special
procedures for the approval of foreign direct
investment.The government particularly
encourages friendly industries, such as
communications, finance, and information
technology, as a way to diversify the economy
and provide new employment in industries with
high value added. Responsibility for attracting
foreign investment lies with the Board of
Economic Development. According to the
board, Luxembourg offers a full range of
tailored investment incentives for new ventures.
Luxembourg is a very attractive tax
location for conducting business: low
effective corporate tax rates (currently
21%); the lowestVAT (value-added tax)
rate in Europe at 17%
6. Doing business in Luxembourg statistics (2015)
Globally, Luxembourg stands at 80 in the
ranking of 189 economies on the ease of
starting a business. Luxembourg eased
business start-up by speeding up the
delivery of the business license. According
to data collected by Doing Business,
starting a business there requires 6
procedures, takes 18 days, costs 2.00% of
income per capita and requires paid-in
minimum capital of 22.60% of income per
capita
Doing Business sheds light on how easy
or difficult it is for a local entrepreneur
to open and run a small to medium-size
business when complying with relevant
regulations.
7. Top Investment
sectors
• Biotechnology / HealthTechnologies:The biotechnology sector enjoys
special tax rates in Luxembourg. Many US biomedical firms and
research institutions have announced major investment plans in
Luxembourg.
• E-Commerce: Luxembourg has a well educated and multi lingual
workforce, which is an attractive factor for investors who intent to set
up headquarters in the EU. “LuxConnect” which is intended to improve
bandwidth connectivity and availability.
• Logistics: Luxembourg has a good network of rail, road network.
Besides, it also has good air connectivity to all major cities in the EU.
8. Merits of the economy
• Advantageous geographical location in
Europe
• Open and safe country
• Easy communication with public authorities
• A business-friendly regulatory framework
• Great political and social stability
• A highly skilled and multilingual
international workforce
• Excellent infrastructures
• A high quality of life
9. Major Setbacks
• The main hindrance to investment in
Luxembourg is in the high cost of living and
high level of consumer demands. there are
sometimes tax disadvantages associated
with investing in Luxembourg funds.
• INVESTORS should also look closely at the
charges associated with a Luxembourg
investment. Often they are higher than the
charges back at home.Time should be spent
carefully studying the cost, as the difference
can be over 5 percent.
10. References
Doing Business Economy Profile 2015 : Luxembourg Available at:
https://openknowledge.worldbank.org/bitstream/handle/10986/23291/Doing0business0iciency000Luxe
mbourg.pdf?sequence=1&isAllowed=y. [Accessed 08 March 2016]
Invest in Luxembourg City | Invest in EU. 2016. Invest in Luxembourg City | Invest in EU. [ONLINE]
Available at: http://www.investineu.com/content/invest-luxembourg-city. [Accessed 08 March 2016].
Luxembourg: country overview — EUbusiness.com | EU news, business and politics. 2016. Luxembourg:
country overview — EUbusiness.com | EU news, business and politics. [ONLINE]Available at:
http://www.eubusiness.com/europe/luxembourg. [Accessed 08 March 2016].
Luxembourg's Attraction to Investors -The Secret Is Out - NYTimes.com. 2016. Luxembourg's Attraction
to Investors -The Secret Is Out - NYTimes.com. [ONLINE]Available at:
http://www.nytimes.com/1995/04/08/your-money/08iht-lux.html. [Accessed 08 March 2016
10 reasons to invest in Luxembourg - Luxembourg. 2016. 10 reasons to invest in Luxembourg -
Luxembourg. [ONLINE]Available at: http://www.luxembourg.public.lu/en/investir/10-raisons-
investir/index.html. [Accessed 08 March 2016].