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Luxembourg vs. Liechtenstein: two countries with high salaries and living standards

Luxembourg is a small country in the heart of Europe, and so is Liechtenstein. But which is smaller, Luxembourg or Liechtenstein? Which has a better quality of life? Where are there more job opportunities? These are common questions when considering relocating for better opportunities and weighing between two alternatives. In this article, we will compare these two countries across multiple aspects to shed light on all these questions.

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A crucial detail to note is that Liechtenstein is not part of the European Union, though it is a member of the European Free Trade Association (EFTA) and the European Economic Area (EEA). This means you can travel to the country with a visa or residence permit from any European country.

Luxembourg vs Liechtenstein: briefly about the main things

Luxembourg and Liechtenstein, two of Europe's smallest yet most intriguing nations, offer contrasting opportunities and lifestyles. Luxembourg boasts the highest minimum wages in the EU and a multicultural environment, while Liechtenstein excels in quality of life with its stunning natural landscapes and low pollution levels.

The choice between these two nations can be challenging, in the following section we will explore and compare key aspects of living in Luxembourg and Liechtenstein, helping you make an informed decision on your ideal destination.

Grand Duchy of Luxembourg
One of the world's smallest countries landlocked in northwestern Europe.
Principality of Liechtenstein
A landlocked country located between Austria and Switzerland that stands out for having the lowest external debt.

Population and territory

We begin our comparative analysis by addressing the question posed at the start of this article: which country is smaller, Luxembourg or Liechtenstein? Luxembourg is one of the smallest countries in Europe, covering an area of 2,590 km². However, Liechtenstein is even smaller, with a surface area of just 160 km². This means Liechtenstein could fit into Luxembourg about 16 times, underscoring just how tiny it is in comparison.

square kilometers – territory of Luxembourg
square kilometers – territory of Liechtenstein

Regarding population, Luxembourg is significantly more populous. As of January 1, 2023, Luxembourg had a population of 660,809, whereas Liechtenstein had only 39,677 residents on the same date. To put it into perspective, Luxembourg has roughly 16 times the population of Liechtenstein, which has fewer inhabitants than many urban neighborhoods.

Source: Eurostat
population of Luxembourg in 2023
population of Liechtenstein in 2023

Additionally, examining the population growth of both nations reveals interesting trends. Since 2012, Luxembourg’s population has increased by 135,956 people, a 25.90% rise. In contrast, Liechtenstein’s population grew by just 3,202 people, representing an 8.78% increase. Luxembourg's population has been growing at a significantly faster rate.

Expat population

Luxembourg had a remarkably high percentage of foreign residents, making up 47.43% of its population, with the majority being Portuguese and French nationals. Interestingly, Liechtenstein surpasses this figure, with 68.61% of its population being foreign nationals in 2022, indicating that more than two-thirds of its residents are from abroad.

General vibe compared

When comparing the cultural and lifestyle differences between Luxembourg and Liechtenstein, there are both notable similarities and distinct differences.

Cultural heritage and festivals

Despite their similarities and proximity, these countries are different in many ways. However, it could be similarly easy to fit in, as the welcoming nature of the countries lends itself to intercultural living.

What are the similarities?
Both countries are known for their high quality of life, with residents enjoying a good balance between work and leisure.
Both countries experience temperate climates with mild winters and cool summers.
Residents of both nations enjoy ample opportunities for outdoor activities, thanks to their beautiful natural landscapes.
Both Luxembourg and Liechtenstein have small populations, fostering a strong sense of community.

Quality and cost of life

The next two aspects we will analyze are the quality of life and the cost of living in both countries, which are crucial and often interrelated elements. Assessing the quality of life for European citizens can be quite challenging due to the subjective nature of this aspect.

Although there are statistics from the European Union that shed some light on this matter, Liechtenstein is not included as it is not a part of the EU, making comparative analysis more difficult. Therefore, we will rely on data from Numbeo, which offers a Quality-of-Life Index.

Quality of life compared in Luxembourg and Liechtenstein
Index usedLuxembourgPointsLiechtensteinPoints
Purchasing Power IndexVery High181.37Very High161.07
Safety IndexHigh65.42Very High85.02
Health Care IndexHigh76.68High70.37
Climate IndexVery High82.62N/A0
Cost of Living IndexModerate62.48Very High98.47
Property Price to Income RatioModerate8.71Very Low4.97
Traffic Commute Time IndexVery Low26.1Very Low0
Pollution IndexLow21.79Very Low6.47
Quality of Life (total index)193.4215.96

We must adjust this index slightly as it is based on eight sub-indices, one of which, related to climate, is not available for Liechtenstein. By recalculating the Quality-of-Life Index excluding the climate factor, Luxembourg scores 193.4, while Liechtenstein surpasses it with a score of 215.96. Although Liechtenstein loses points due to its high cost of living and is slightly lower in the health index, it outperforms Luxembourg in all other areas.

Cost of living

Now, let's examine the cost of living in Luxembourg versus Liechtenstein. The cost of living is relatively high in both countries, but to understand the extent, it's useful to use reference indexes. Numbeo provides the world's largest database on the cost of living, and its data and indexes offer a clearer picture.

Numbeo provides several indexes, all based on comparisons with costs in New York City. Their most comprehensive index, the “Cost of Living Plus Rent Index” estimates the prices of consumer goods, including rent, relative to New York City.

Source: Numbeo

In the “Cost of Living Plus Rent Index,” comparing data from 260 major cities in Europe, we find that Vaduz, the capital of Liechtenstein, is one of the most expensive cities in the world, only surpassed by major Swiss cities and significantly more expensive than Luxembourg.

The only area where Luxembourg is more costly than Liechtenstein is housing costs, although not by much, as Liechtenstein closely follows. In other indexes, such as the Groceries Index, Restaurant Price Index, and Local Purchasing Power Index, Luxembourg is better positioned.

Trains and buses
Public transport in Luxembourg is completely free, learn why in our article
Read the article

Employment and job opportunities

We have arrived at a crucial point: employment and work opportunities. Both countries offer ample opportunities, but each excels in different areas.

Top industries


How to get a job in Luxembourg: application, interview, contract

Working as a foreigner

Both countries continuously attract professionals from around the world. However, Luxembourg, being larger, experiences higher immigration for work purposes. In 2022, Luxembourg welcomed 3,204 people, while Liechtenstein only welcomed 124. Moreover, the trend in work-related immigration shows a growing increase in Luxembourg, while in Liechtenstein, it has remained practically stable over the past decade.

Source: Eurostat
BYOB (Bring Your Own Business)

Both Luxembourg and Liechtenstein are ideal countries to take your business there or to start one, if you want more information on this subject we recommend a couple of sites with information on it, one for Luxembourg and one for Liechtenstein.

Professions in-demand in Luxembourg vs. Switzerland

The following table shows the most in-demand professions in both countries, with data sourced from Luxembourg's ADEM (Agence pour le Développement de l’Emploi) and Visit World Today website.

Top demanded jobs in both countries in 2024
🇱🇺 Luxembourg🇱🇮 Liechtenstein
Analysis of loans and banking risksEngineers
Bank customer managementMetallurgists and machine tool builders
Front office, back office and middle management in the financial markets sectorIT-specialists
Paving and restoration of pavementsMarketing specialists
Management and engineering research and industrial developmentInterpreters
Production Management and EngineeringTeachers at institutions of higher education
Installation and maintenance of industrial and operating equipment  
Caregiver Assistant / Nurse 

Minimum wages and salaries

In Luxembourg, there are two minimum wages: one for unskilled workers and another for skilled workers. The minimum wage for an unskilled worker aged 18 or older is 2,570.93 euros, while for a skilled worker, it is 3,085.11 euros.

We have previously covered the possible salaries in Luxembourg in our article
Read article

According to the International Labour Organization (ILO), in 2022, the average salary in Luxembourg was 7,044 euros per month, amounting to about 84,500 euros per year. But Liechtenstein does not have a minimum wage, with wages being determined through negotiation. The latest data from the ILO on average wages dates back to 2018, indicating an average salary of 6,675 Swiss francs, or about 83,000 euros per year.

The average salaries are different from minimal, and represent the usual payment one can count on on skilled positions in both countries
euros was the average monthly salary in Luxembourg in 2022
Swiss francs was the average monthly salary in Liechtenstein in 2018

Taxation of the income

Comparing taxes is complex due to the variety of tax types in each country. Therefore, a starting point for clarity is to compare income tax rates and maximum rates. The highest tax bracket in Luxembourg is 45.80%, much higher than in Liechtenstein, which stands at 22.4%.

Source: Tax Foundation and pwc

However, this is only an initial perspective. Many other factors should be considered. This overview provides a starting point for evaluation, but seeking professional advice tailored to individual circumstances is highly recommended.

Before and after taxes

If you would like to get an idea of how much tax you would have to pay in Luxembourg, take a look at our service. We have created an income calculator, that explains a lot.

Relocation procedures and options

Relocating to a new country involves a myriad of questions and considerations. When contemplating a move to Luxembourg or Liechtenstein, one might wonder about the visa requirements, residency permits, and the overall process of settling into a new environment. Here, we explore the most common relocation options and the primary requirements associated with each.

Popular grounds for relocation


How to choose where to relocate between Luxembourg and Liechtenstein?

Choosing between Luxembourg and Liechtenstein for relocation can be a challenging decision, as both countries offer unique benefits and drawbacks. Whether you prioritize economic opportunities, quality of life, or lifestyle preferences, understanding the positive and negative aspects of each country can help you make an informed choice.

🇱🇺 Luxembourg's best and not-so
Luxembourg boasts the highest minimum wages in Europe, ensuring a good standard of living for its residents.
The country offers a vibrant, multicultural environment with a large number of foreign nationals, providing a diverse and inclusive atmosphere.
Luxembourg offers special visas such as the European Blue Card, making it an attractive destination for highly skilled professionals.
Entrepreneurs will find Luxembourg appealing due to its low corporate tax rates, fostering a business-friendly environment.
The country has a well-developed healthcare system, providing high-quality medical care.
Luxembourg offers free public transportation, making commuting convenient and cost-effective.
While not as high as in Liechtenstein, the cost of living in Luxembourg is still considerable.
The top income tax bracket in Luxembourg is relatively high, which can be a financial burden.
The cost of housing is extremely high, making it challenging to find affordable accommodation.
Obtaining a student visa requires proving substantial income, which can be difficult for foreign students.
The weather can be less than ideal, with generally low temperatures and frequent rain.
🇱🇮 Liehtenstein's pros and cons
Although Luxembourg has relatively low pollution, Liechtenstein offers even cleaner air and environment.
Despite the absence of a minimum wage, salaries in Liechtenstein are generally quite high.
Compared to most European countries, Liechtenstein has lower income tax rates, making it financially attractive.
Liechtenstein is one of the safest countries in the world, with very low crime rates and a secure living environment.
The country boasts stunning alpine landscapes and ample opportunities for outdoor activities such as hiking, skiing, and cycling.
Liechtenstein has one of the highest costs of living in Europe, surpassing that of Luxembourg.
The country has stringent immigration laws, making it difficult to obtain residence and work permits.
Compared to Luxembourg and larger cities, Liechtenstein offers fewer entertainment and nightlife options.
The alpine climate can be difficult for some, with cold, snowy winters and moderately warm summers.
Due to its small size, Liechtenstein relies heavily on imports for many goods, leading to higher prices and limited availability of certain products.

Frequently Asked Questions (FAQ)

Which country is smaller, Luxembourg or Liechtenstein?

Which country has a higher cost of living, Luxembourg or Liechtenstein?

How do the tax rates compare between Luxembourg and Liechtenstein?

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