Top 7 Challenges Of Doing Business In Luxembourg

Despite its strong economic credentials, doing business in Luxembourg can be a difficult task without prior knowledge of the corporate landscape. Here are some of the areas that can trip up a commercial business new to the Grand Duchy.

It might be small, but tiny Luxembourg packs a punch on the international business stage. Nestled in the heart of Europe, Luxembourg's size means it has necessarily taken on outside influences to stay relevant, and its diverse activities help make it competitive, strong and stable. It's also the easiest place in the world to trade across borders, according to World Bank rankings.

The country is a founder member of the European Union, NATO and the UN, and the city of Luxembourg is the seat of several institutions and agencies of the EU. It is a political centre as well as a financial hub for the region. With strong economic credentials, doing business in Luxembourg can be a difficult task without prior knowledge of the corporate landscape. Here are some of the areas that can trip up a commercial business that is new to the Grand Duchy.

  1. Getting set up

    Luxembourg is ranked 66th in the world for ease of doing business by the World Bank in 2018. Lawyers, doctors, statutory auditors, banking and certain financial services and insurance are covered by different laws to the majority of businesses, so your area of commercial activity will govern how easy it is to set up and start trading. Income tax, VAT and social security registration is also required. If you're registering a holding company in Luxembourg, you'll need to meet the necessary requirements for authorised capital, shareholders, accounting and auditing among other items.

  2. Proving your professionalism

    To apply for a business permit from the Ministry of Small and Medium Sized Businesses, you will need, among other things, to provide evidence of your professional qualifications and your professional integrity. The way you do this will depend on your profession and background - but the good news is you can provide documents in German, French or English.

  3. Organised labour

    Companies and individuals carrying out commercial activities must become members of the Luxembourg Chamber of Commerce, while skilled craftsmen must become members of the Chamber of Trades. This will be done automatically; the tax authorities will notify the relevant chamber on your behalf.

    Luxembourg also has a strong history of workforce representation, with works councils found in most...

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