Located in the heartland of Western Europe, Luxembourg is a primary launchpad to access all European markets. And this strategic position has attracted many foreign investors to set up businesses in the country.
In addition to having one of the lowest levels of public debt in Europe, the living conditions in Luxembourg are pleasant and green space is abundant.
The Grand Duchy of Luxembourg has a reputation for having a strong economic environment, in addition to a prominent commercial and political neutrality that helps promote first-class international business relationships.
Doing business in Luxembourg is easy. Thanks to the successful efforts of the governments to create a favorable environment for business.
In addition to a high standard of living, openness, economic stability, and a skilled workforce, stated next are the key reasons people are setting up a business in the Grand Duchy of Luxembourg.
Luxembourg offers entrepreneurs : an attractive tax system
A good reason why companies choose to set up in Luxembourg is the tax-friendly system.
When it comes to corporate income tax – it is one of the most competitive rates in Europe and companies in Luxembourg may be entitled to tax reduction measures, depreciation, and even tax credits. The country has also enforced a policy of no double taxation for companies.
Luxembourg has signed double taxation treaties with over 80 (one of the highest) countries around the world. This makes setting up a company very attractive and allows a tax-efficient business arrangement (if a company has paid its tax in Luxembourg it does not have to pay taxes in the countries it has treaties with thus bypassing higher tax rates in those countries).
Luxembourg has treaties with all European Union member states as well as with OECD (Organization for Co-operation and Development) members and the network of double taxation treaties continues to grow.
Lastly, VAT is the lowest in Europe, with the standard rate being 16%, intermediary rate of 14%, reduced rate of 8%, and the super-reduced rate, of 3%.
Governmental support
Investors are becoming increasingly convinced that Luxembourg is a great destination for a startup or a branch of an already established company. And being extremely pro-business the Government of Luxembourg has been encouraging foreign investment.
And to facilitate this further, Luxembourg has a lot of measures to support companies in their endeavors. Support programs have been established to promote the creation, takeover, modernization, and expansion of companies in Luxembourg. There are also initiatives that enable entrepreneurs who are starting up a company to meet investors for funding.
Reputable banking
One of the primary requirements for establishing any company is a reputable bank account and Luxembourg is well-equipped for this. Luxembourg has a reliable banking industry, where setting up a bank account is very simple. Also, there are several cases where opening an account in Luxembourg can be done fully online. Additionally, multi-currency accounts are generally available in Luxembourg which makes dealing with trade and business from around the world easy.
Simplified procedures
Luxembourg urges companies to set up in the country, so the creation of companies in Luxembourg takes little time and requires few constraints with notably qualified public administrations that work efficiently in order to facilitate the processes. Finally, you can create a company in Luxembourg irrespective of your nationality.
Social competitivity
In Luxembourg, the combined social security rates differ between 25.72% and 28.25% which is one of the lowest rates in Europe. Borne by the employee is 12.45 %, and borne by the employer is 12.16 %. In addition to these are the accident insurance of 1% and the employer contribution that differs between 0.51% and 2.92% according to the class.
Luxembourg is the great jurisdiction for your next business
Although English is generally used in the business context, Luxembourg has 3 official languages – French, German, and Luxembourgish. This facilitates easy communication for many entrepreneurs who have different languages.
Also, Luxembourg’s location in Europe in addition to excellent road, rail, air, and waterway infrastructure positions the country as an active intercontinental logistics hub.
Honored and appreciated for all these reasons, Luxembourg is presently an Eldorado for companies wishing to develop their activities.
If you thinking of setting up a company in Luxembourg, let’s go ahead and contact your Damalion expert now.
