Luxenbourg Capital Luxembourg Currency (EURO) Language German, French Population 474,000 EU status member GDP 2006 $32.6 billion Employment 95.9% Exports $19.55 billion f.o.b. (2006 est.) Imports $24.22 billion f.o.b. (2006 est.)

setting up business Number of days to start business Data not available Cost (% of income per capita) Data not available Nonwage labor cost (% of salary) Data not available Total tax rate (% profits) Data not available

Luxenbourg

“Small is beautiful” certainly applies to Luxembourg

The Grand Duchy of Luxembourg is the smallest of the 27 European Union countries. Located in the heart of Europe, it borders Belgium on the west and north, Germany on the east and France on the south. The political situation is very stable: executive power is vested in the Prime Minister of Luxembourg, Jean Claude Juncker, who is the longest-serving Prime Minister in Europe; legislative power is vested in the Chamber of Deputies.

The country has three official languages: French, German and Luxembourgish. Luxembourgish people are well known for their multilingualism. There are also large Portuguese and Italian communities, thereby making those two languages widely spoken as well. A strong believer in a unified Europe and in strong multinational organizations, Luxembourg is a founding member of both the EU and NATO. Indeed, it was one of the six founding countries of the European Economic Community in 1957. Today the legal and financial operations of the EU are headquartered in Luxembourg which makes Luxembourg city one of the EU co-capitals along with Brussels and Strasbourg.

Luxembourg is, as well, at the center of the “Greater Region” comprising the Grand Duchy, Lorraine (France), Saarland and Rhineland Palatinate (Germany) as well as Wallonia (Belgium). Although the country’s population amounts to only 459,000 inhabitants, this central location gives direct access to the very wealthy 11.2 million consumer market within the “Greater Region”. Over the past 30 years the country’s residential population has known an unparalleled growth, mainly driven by immigration. The population rose from 340,000 in 1970 to over 450,000 in 2005 (Source: Statec). The workforce is highly international and multicultural: frontier workers (about 116,070 people) and foreign residents represent 66% of the working population of about 438,000.

Employers can tap a readily available population of five million experienced and qualified industrial workers and service employees in the region. Luxembourg enjoys the best labor/ management working environments in the EU. The principal reason for this is that the government, unions and employers have worked out a unique co-operative arrangement wherein they work together and reach common decisions rather than negotiating contentiously. As a consequence, labor unrest and strikes are very rare and the numbers of days lost due to industrial action are the lowest in Europe on an ongoing basis.

BUSINESS OPPORTUNITIES

The Grand Duchy offers a wealth of business opportunities based on its central location in Europe, the supportive business climate, multilingual resources, efficient and fast administrative channels and interesting fiscal opportunities. “Small is beautiful” certainly applies here! The government is extremely responsive to business issues and offers a level of accessibility not easily found in any other European country. Although the principle and dominant driver of the economy is the exceptionally strong financial sector, a broad range of global players from industries as diverse as e-business, logistics, automotive industry, banking, insurance, and investments funds have chosen Luxembourg as their main European location, including Delphi Automotive Systems, FANUC Robotics and Goodyear, to name just a few.

CORPORATE TAXATION

Luxembourg’s tax regime is highly business oriented. Corporations will find the country offers the lowest combined VAT rates in the EU, pre-financing optimization (for B2B transactions), full VAT deduction for car leasing, fuel, entertainment expenses, etc. A thriving financial sector is proof of the success of the regime.

Luxembourg’s tax structure features:

• Low effective tax rate;
• Fiscal unity allowing for the consolidation of tax results;
• Reliability of tax laws;
• Flexible tax-efficient structuring possible;
• Application of EU Directives on taxation reduces the reliance on double tax treaties;
• Expanding tax treaty network for non EU investments;
• Flexible transfer pricing rules;
• Tax certainty through Advance Tax Agreements.

Why LUXEMBOURG?

Summarizing Luxembourg’s advantages as a business location, 10 key differentiating factors can be named:

• A highly strategic position;
• A neutral place;
• A very welcoming and safe country;
• A financially healthy country;
• A skilled multicultural workforce;
• Excellent basic infrastructure;
• Top level financial and multinational IT clusters;
• Good logistic support;
• Flexible and welcoming authorities;
• An attractive lifestyle.

BILATERAL BUSINESS SUPPORT

Founded in 1996, the American Chamber of Commerce in Luxembourg (AmCham) is an international voluntary organization of business and professional persons committed to fostering business relations between the United States and Luxembourg, promoting cross-cultural understanding and enhancing the quality of life of Americans and other expatriates who live and work in the Grand Duchy.

 

Contact IInformation

American Chamber of Commerce in Luxembourg
6 rue Antoine de Saint-Exupery
B.P. 542
1432 Luxembourg
Tel: +35 243 1756
E-mail: info@amcham.lu
Website: www.amcham.lu

 

Useful websites

www.luxembourg.usembassy.gov	US Embassy in the Luxembourg
www.etat.lu	Government page with links to all ministries
www.statec.lu	Institute of Statistics
www.ont.lu	Official tourist office website

 

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