Why invest in Luxembourg?

Luxembourg is a country with a solid and diversified economy, one of the most open in the world, but it also stands out for its political stability. Economic and social issues are discussed at tripartite meetings attended by the government, employers and trade unions. Social dialogue is therefore an important feature of the Luxembourg political system,facilitated in particular by the small size of the country and the close proximity between the various decision-makers.

 

This political, economic and social stability, coupled with its strategic position in Europe, make the country extremely attractive for investors. On 25 January 2025, the government confirmed Luxembourg's AAA rating. This triple A, awarded by S&P Global Ratings, guarantees the State's excellent creditworthiness, underlining “‘a robust financial sector and an efficient and transparent institutional framework”^.(1)

 

For companies

Luxembourg's corporate tax rate is one of the main attractions for investors. All the more so as on 1 January 2025, changes came into force as a result of the plan to strengthen the competitiveness of Luxembourg businesses and the economy. The rate of corporation tax in Luxembourg has been cut from 17% to 16% for companies with taxable income of over €200,000 and from 15% to 14% for SMEs with income of up to €175,000.

In addition to this corporate tax regime, Luxembourg offers a number of tax exemptions, subject to certain conditions, such as exemptions on dividends and capital gains. Holding companies can also benefit from an attractive tax regime.

Luxembourg companies can take advantage of tax deductions and depreciate their assets over certain periods, as well as deducting various business expenses. For companies from other countries, Luxembourg's international tax treaties are an advantage.

 

 

If you want to start a family, Luxembourg is an excellent place to do so. It is home to a vibrant international and multilingual culture. Safe public spaces and modern, high-performance sports and cultural facilities offer great opportunities for families. But that's not all: Luxembourg has a relatively advantageous inheritance law framework.

 

In principle, in the absence of a will, Luxembourg law determines how the estate is organised. It is therefore the heirs who receive the deceased person's assets, if they accept the inheritance. Descendants are the preferred heirs, followed by the surviving spouse. There is no inheritance tax to pay between ascendants and descendants in the direct line, or between spouses or legal partners where there are children in common.

 

When it comes to estate planning, you can draw up a will during your lifetime to ensure that your estate is divided up according to your instructions. You can also make a donation. In Luxembourg, this can be quite advantageous as you can make a donation without going before a notary (only for personal property) and therefore without paying registration fees. Life insurance is another attractive tool for preparing inheritance in Luxembourg and guaranteeing a transfer of assets on beneficial terms.

 

In Luxembourg's international context, it is nevertheless advisable to remain cautious and to prepare ahead of time for issues relating to the transfer of assets. Not only the place of residence but also the nationality of the deceased and the heirs affect the rules to be applied, depending on the countries involved.

Luxembourg is the world's second-largest centre for investment funds, after the United States. The country was a pioneer in European fund regulation. Its international expertise is renowned, with investment funds from over 80 countries in Europe, Asia, Latin America and the Middle East.

Luxembourg offers a diversified range of financial instruments that can be adapted to the specific needs of individual and institutional investors. Find out more about the investment opportunities offered by BGL BNP Paribas.

Investing your money in an investment fund in Luxembourg is all the more attractive because the regulatory framework is solid and transparent.

With the highest GDP per capita in the world and an investment grade (AAA) financial rating, Luxembourg's financial reputation is well established. Its secure environment and capacity for innovation and growth hold great promise for all kinds of investors.