5 reasons to choose Luxembourg as your European business hub

What would be a better basis for developing and growing your business in the European market than the most international country in the EU? In this guest blog, Luxembourg Trade & Invest highlights 5 reasons why international companies should consider Luxembourg as a location for their European headquarters or offices.

An ideal launchpad for doing business in Europe

With its 445 million consumers, the European Union is clearly one of the most attractive markets in the world. But what country should companies choose as their basis for growth and expansion on this united yet diverse market? There is much that speaks in favour of Luxembourg.

As an EU founding member and member of the Eurozone, Luxembourg first of all offers immediate access to the 27 EU countries, 19 of which use the same currency (euro).

Its geographical location is excellent: the country borders two of the EU’s main consumer markets, France and Germany, and provides easy access to main business and cultural centres in Europe. 60% of the EU’s GDP can be reached within a one-hour flight.

However, it is not only a matter of physical proximity – Luxembourg also has exceptionally strong political, cultural and business links with its neighbours. This trilingual country (Luxembourgish, German and French are official languages) offers a bridge between countries with rather different cultures and business approaches. Having a base here makes it easy for companies to gain a foothold in many places across Europe.

Luxembourg has always valued international cooperation, and is in fact the 4th most global economy in the world.

The economy is strongly export-oriented, and as a leading financial centre specialised in global and European cross-border activities, it has a well-developed legal and regulatory framework for international trade. It is also quick to implement EU legislation.

With its diverse population, relatively small size and closeness to technological hotspots in Europe, Luxembourg also is an excellent testbed for the development and commercialisation of new products and services and a good place for doing product localisation for different EU markets.

International talent pool

“When in Rome, do as the Romans do” – the proverb might be old, but there is still a lot of truth in it. If you want to succeed in business, you need to have an in-depth understanding of your business partners and clients.

So where do you start when you want to address a market consisting of 27 different countries?

Here as well, Luxembourg is ideally placed to help companies successfully address this challenge. Language skills are excellent: inhabitants speak on average 3.6 languages – the highest figure in the EU. English is very widely spoken and used extensively in the business community.

On top of this, 47% of the population is made up of foreign nationals, and with 200,000 cross-border workers, almost three-quarters of the workforce is international.

This available talent pool is ideal for setting up teams able to deal with customers from any European country in their own languages and culture. Luxembourg also comes out 3rd in the 2020 World Talent Ranking, where it stands out for its ability to attract and retain talent and the availability of foreign highly-skilled personnel.

Pro-business policies

A number of international groups have their global or European headquarters or R&D centres in Luxembourg: Amazon, Goodyear, Guardian, Cebi, Circuit Foil and Husky Injection Molding Systems, to mention but a few.

They are attracted by the country’s flexible and attractive legal framework and business-friendly policies. Public authorities and government officials are easy to access, and the open-mindedness and forward-thinking of politicians benefits companies looking to start or relocate activities here. Luxembourg-based companies can also benefit from attractive public funding programmes.

Luxembourg’s dynamic public research environment is widely recognised on the international level in fields including material sciences, health and biomedicine, data sciences and ICT. Public research centres are open to cooperation with the private sector and keen to collaborate with companies on product development and tests. The most recent business-oriented research venture is the recently inaugurated European Space Resources Innovation Centre (ESRIC).

A digital hub and trusted data economy

Luxembourg is also strongly committed to providing an environment where any company relying on digital technologies and the use of data can thrive and grow.

Recognised as a digital forerunner for decades, the country’s digital infrastructure is outstanding in terms of connectivity and secure data storage capacities. It has recently been boosted with the unique business-oriented high performance computer (HPC) MeluXina, which makes 65% of its capacity available to start-ups, SMEs and large companies.

The country is also among the front-runners in both Europe and the world for its cybersecurity commitment and expertise. The role played by the Ministry of the Economy, which considers cybersecurity not only as a defence issue but also as an economic success factor, makes Luxembourg a unique case in Europe.

Luxembourg’s appetite to remain on the cutting edge of innovation is key to the launch of new initiatives such as the Luxembourg Institute of Science and Technology’s research project aimed at creating a digital twin of the whole country. Next comes the creation of a fully functioning data market.

The country is exploring the creation of a national data exchange platform that would ensure that data from various producers – public bodies, companies and research organisations – would be usable, interoperable, accessible, reliable and compliant with privacy regulations.

Solid economy, stable society

The economic turbulence caused by the coronavirus pandemic has underlined the importance of a business environment that is stable over time. Luxembourg has successfully risen to the challenge during the crisis.

It is one of the few countries in the world that is AAA rated by all major credit agencies, for example. It experienced a very slight recession in 2020 (-1.3%), has positive growth indications for 2021 and very healthy public finances in spite of the massive amount of measures put in place to alleviate the health crisis and support local companies.

Luxembourg has the highest GDP per capita in the world and the 2nd highest labour productivity. Unemployment is low, and the country is well known for its political stability and long-term policy approach.

Do you want to know more and explore Luxembourg further? Visit the Luxembourg Pavilion at EXPO 2020 DUBAI.

For more information, visit Luxembourg Trade & Investment and have a look at these 10 good reasons why to choose Luxembourg as your European location. Please also feel free to contact the Luxembourg Trade & Investment Office in Abu Dhabi.


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