Business

Best business opportunities in Luxembourg: a complete guide

Are you thinking of starting a business and considering the Grand Duchy as a possible option? Let us tell you that you are right to do so, Luxembourg is an excellent alternative. But you don't have to believe it just because we say so. In this article, we will review the factors that make this country a fertile ground for sowing the seeds of a business. We will explore the most attractive sectors in the country along with some interesting ideas, review the main legal structures, and look at the process for registering one of these.

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Although the country has firms in all sectors of the economy, a large proportion of companies are linked to the financial sector. This sector has become the country's economic engine, with a strong emphasis on banking, fund management and fintech. It is so important that according to a report by Luxembourg for Finance and Deloitte, if the direct, indirect and induced effects of the financial sector on the rest of the economy are taken into account, 135,519 jobs, representing 29.5% of national employment, were linked to the financial sector at the end of 2021.

Why choose Luxembourg for your company

If you are looking for business opportunities in Luxembourg, one of the first things to ask yourself is why choose this country to do business? What is so attractive about it that makes it stand out from the rest? Well, below we will review some of these factors:

Political and economic stability

Luxembourg has one of the highest GDP per capita in the world, which illustrates its economic stability and high standard of living. This political and economic stability offers a safe and reliable environment for business.

Strategic geographic position

The country's location in the centre of Europe allows the companies it hosts direct access to their neighbouring markets. This proximity, together with its excellent land and air transport infrastructure, allows access to around 60% of European countries in less than half a day and makes the country a centre of great logistical relevance.

Favourable tax environment

The Luxembourg government has established an extremely attractive tax environment for companies that include competitive corporate rates and exemptions for certain income, as well as double taxation agreements with more than 80 countries. Additionally, while other countries tend to increase their rates, Luxembourg is going in the opposite direction. At the end of 2024, the Luxembourg Parliament voted on a series of bills that introduce important tax changes aimed at supporting businesses and individuals.

Speed of administrative procedures

The country has a light, agile, efficient administrative structure that is capable of quickly adapting to change.

Support for entrepreneurship and innovation

Luxembourg has a large number of programs and resources to support innovation and entrepreneurship, which makes starting a project from scratch much easier.

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Key sectors for business in Luxembourg

Each country has its particularities and characteristics that make it a better or worse option for certain types of business. Some have an extraordinary climate that makes them an excellent option for agricultural projects or tourism businesses, while others have other resources such as a highly qualified workforce suitable, for example, for advanced engineering projects.

When looking for the best business to start in Luxembourg, it is therefore essential to identify the most developed sectors of the economy in the country with the most growth potential. Some of these sectors are as follows:

Financial services and fintech

As we mentioned at the beginning, Luxembourg has an extremely robust financial sector. It is home to a large number of international banks, investment funds and insurance companies. In addition, the country has positioned itself as a hub for Fintech companies, fostering innovation in financial technologies such as blockchain and digital payments.

One of the country's major attractions and one of the main benefits of setting up a company in Luxembourg in this area is the Luxembourg House of Financial Technologies (LHoFT), a centre specializing in Fintech. It offers a business incubator for startups in the technology and finance sector. This centre also offers a wide range of services to Fintech companies, as well as to established financial institutions, companies, venture capital investors, and legal and advisory firms.

Pros and cons

Global financial centre: Luxembourg is one of the EU’s main financial hubs with a favourable regulatory environment.

Government support: programs such as LHoFT promote Fintech.

International access: connection to global markets thanks to the strategic location and international treaties.

High competition: the presence of large institutions can make it difficult for new companies to enter the market.

Regulatory barriers: complying with the EU's strict financial regulations can be costly and complex.

High costs: skilled labour and financial offices are expensive.

Technology and innovation

Digitization is at the heart of Luxembourg's economic strategy. Sectors such as software development, artificial intelligence, cybersecurity, and data are growing rapidly, thanks to government support and access to excellent digital infrastructure, such as the MeluXina supercomputer. In addition, the country offers multiple forms of aid to companies involved in innovative projects, such as the Fit 4 Start program or aid for R&D&I projects:

Fit 4 Start
This is an acceleration program aimed at new technology and data companies whose businesses are based on innovative technologies, mainly in the digital, healthcare and space sectors. The program offers intensive advice, attractive non-participatory funding and access to key networks to help them successfully launch their business and develop it in the European market.
Aid for research, development, and innovation projects
This consists of multiple grants focused on incentivizing competitiveness and economic growth through support for innovative projects:this consists of multiple grants focused on incentivizing competitiveness and economic growth through support for innovative projects:

Pros and cons

Advanced infrastructure: supercomputers like MeluXina and high-quality digital networks.

Financial incentives: grants and support programs for technology startups.

Strong collaborative ecosystem: universities, companies and research centres working together.

Competition for specialized talent: competition for IT experts.

Dependence on international alliances: many innovations depend on external cooperation to scale up.

High initial costs: high-tech infrastructure and salaries are expensive.

International trade and logistics

Thanks to its strategic location in the heart of Europe, Luxembourg is a key point for international trade. Large logistics and transportation companies such as Cargolux have operated in the country for years, and its solid air and rail infrastructures make it a reliable centre for moving goods throughout Europe.

Pros and cons

Strategic location: ideal for distribution and transportation.

Transport infrastructure: advanced cargo airport and solid rail connections.

Trade facilitation: favourable policies for international trade and efficient customs.

Regional competition: neighbouring countries offer similar logistics services.

High labour costs: difficulty competing with other less expensive countries.

Dependence on external transportation: geographical limitations such as the lack of access to the sea.

Biotechnology and healthcare

Luxembourg is emerging as an innovative centre for the life sciences, biotechnology, and the healthcare sector and offers great opportunities for companies that want to start up in this sector. The Luxembourg government has, for example, committed to promoting biotechnology through the creation of important centres, such as the Luxembourg Institute of Health (LIH) and the Integrated Biobank of Luxembourg (IBBL). These centres support biomedical research, advances in personalized medicine and the integration of big data in health research.

Pros and cons

Strong research network: centres such as LIH and IBBL drive medical innovation.

Government support: investments and grants for biotechnology and health startups.

International collaboration: connections with research institutions in the EU and beyond.

High development costs: equipment, laboratories, and qualified personnel are expensive.

Limited access to specialized talent: the demand for professionals in this area can exceed the local supply and force companies to look for international talent.

Slow regulatory processes: complying with health and biotechnology regulations can be long and complex.

Green industry and sustainable economy

Luxembourg is committed to a sustainable future, which creates opportunities for businesses in renewable energy, the circular economy and clean technologies. Companies that develop solutions in areas such as energy efficiency and sustainable transport have fertile ground for growth in the country. In addition, the country has multiple grants in this area, two of which are as follows:

Fit 4 Sustainability: this program offers companies the possibility of carrying out an environmental impact assessment of their activities, followed by recommendations to reduce that impact. The aid is granted in the form of a capital subsidy.
Investment aid for the protection of the environment: companies that invest in eco-technologies or environmentally friendly processes can benefit from a specific aid scheme.

Pros and cons

Green commitment: national policies favourable to sustainability.

Investments in renewable energy: funds for circular economy and clean energy projects.

High social awareness: growing local demand for sustainable products and services.

High initial costs: investments in green technology can be prohibitive.

Slow adoption: changing consumption habits and mentality takes time.

Risk of over-dependence on subsidies: some green projects are overly dependent on government aid to be viable.

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Business entities in Luxembourg

When doing business in Luxembourg, it is ideal to choose a business sector in line with the characteristics and advantages offered by the country. It is also necessary to know what legal structures the country offers. So, let's review them:

Private limited liability company (SARL)

This is one of the most common forms of company in Luxembourg, designed for small and medium-sized enterprises. In this structure, the liability of the shareholders is limited to their capital contributions, which means that they are not liable with their assets for the debts of the company.

Simplified Limited Liability Company (SARL-S)

This type of company is very similar to SARL. It differs mainly in that it frees entrepreneurs from certain limitations associated with the creation of the company. For example, a minimum share capital reduced to one euro and a constitution that can be done by private deed, without the intervention of a notary.

Public Limited Company (SA)

As with a SARL, there is a limitation of liability up to the amount of capital contributed, but a big difference is that an SA can issue shares that are listed on the stock exchange.

Simplified Joint Stock Company (SAS)

This is very similar to an SA, characterized by its great flexibility in structure and governance. SAS is particularly suitable for start-ups, joint ventures and small or medium-sized companies looking for a less formal structure than the SA, but with sufficient capacity to develop complex projects. Its minimum share capital is only €1 and the liability of the shareholders is limited to the amount of their investment. The shareholders can freely define the rules of governance and transfer of shares through the statutes, although the shares cannot be listed on the stock exchange.

Limited partnership (SCS)

A partnership made up of two types of partners: limited partners, whose liability is limited to their contributions, and general partners, who have unlimited liability. It is a suitable structure for certain investments or businesses in which some partners wish to limit their risk, while others are more involved in the management.

Special limited partnership (SCSp)

This is a limited partnership that does not have a legal personality, which means that it is not considered a separate entity from its partners from a legal and fiscal point of view. Like SCS, it is made up of limited partners who can be considered passive investors and general partners who manage the company.

Partnership limited by shares (SCA)

This is similar to the SCS but allows the limited partners to own shares in the company, making it a hybrid structure between a limited partnership and a public limited company. It is mainly used in more complex investment structures.

Cooperative company (SCOP)

This is a form of company where the partners come together to achieve a common goal, such as offering services or products. Cooperatives operate democratically and tend to be popular in areas such as the agricultural or service sectors. The main characteristics of a cooperative society (SCOP) are a variable number of partners, variable contributions and the absolute non-transferability of shares to third parties.

How much does it cost to open a company in Luxembourg

Each of these structures has different associated incorporation costs, the two most relevant being the minimum share capital and the need to use a notary. Notary fees vary depending on the complexity of the process and the value of the share capital, but they are usually in the range of 1,000 to 3,000 euros, although this figure may be higher if the company has a complex structure or a high share capital. The following table summarizes these two points:

Legal Form	Minimum Capital Required	Requires a Notary?
SARL	12,000 euros	Yes
SARL-S	1 to 12,000 euros	No
SA	30,000€, at least 25% paid up	Yes
SAS	No specific minimum capital required	Yes
SCS	No specific minimum capital required	No
SCSp	No specific minimum capital required	No
SCA	30,000€, at least 25% paid up	Yes
SCOP	No specific minimum capital required	By notarial deed if liability is limited; otherwise, by private deed.

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Business ideas for Luxembourg in 2025

We have already seen the best sectors for entrepreneurship in Luxembourg and we have taken a look at some of the country's legal structures. Now there is one fundamental question left, what is the company going to do? If you are short of ideas, don't stress, we are going to give you a hand with some business ideas in Luxembourg across different economic sectors.

Financial planning tool with emotional projection

A fintech service that combines artificial intelligence and behavioural psychology to help people manage their finances based not only on pure financial data but also on their emotional goals, their values and their desired lifestyle. The tool could generate personalized spending and investment plans assisted by AI with predictive models that show how current financial decisions will impact future quality of life.

Real estate tokenization platform

A blockchain-based startup that facilitates real estate tokenization and enables the purchase and sale of fractional property interests using digital tokens.AI-based cybersecurity solutions for SMEs: development of an artificial intelligence-driven cybersecurity tool specifically for SMEs. The system would identify and block threats in real-time, such as phishing or malware attacks. It provides automatic reports so that companies can optimize their security without the need for an advanced technical team, which is often unaffordable for small businesses in Luxembourg.

Portable energy storage solution

A business focused on the development of high-capacity, environmentally friendly portable batteries designed for homes or small businesses. These batteries would allow energy from renewable sources to be stored for use at night or during peak hours.

Affordable genetic tests for personalized medicine

A company offering affordable and accessible genetic tests designed to personalize medical treatments and lifestyle recommendations. Through this service, patients could receive health plans based on their genetic profile to prevent disease or improve the effectiveness of therapies they are already following.

How to start a business in Luxembourg

To finish up, here is a look at the process for setting up a company in Luxembourg. Bear in mind that although it may seem simple, there are a lot of things to take into account, so it is advisable to plan the process well and allocate enough time.

Preparation of the project and creation of a business plan

Before starting the legal process of incorporation, it is essential to carefully prepare the business project, this involves preparing a detailed business plan containing a market analysis, a marketing strategy, the organizational structure and financial projections. This document is essential as it serves as a roadmap to guide the company's growth and make informed decisions. It is also a key tool for attracting investors, obtaining financing, assessing the viability of the business and anticipating challenges and opportunities.

Domiciliation of the company

The company must have a registered office in Luxembourg, this choice must comply with local regulations and be suitable for the business activity.

Choice of a name for the company and verification of its availability

Before establishing a company, the entrepreneurs must choose a name for the company and check its availability. This is done by applying for a certificate of name availability electronically with the Luxembourg Business Registers (LBR).

Opening of a bank account and deposit of the share capital

Before signing the deed of incorporation, it is necessary to open a bank account in the name of the company being formed and deposit the share capital. Upon doing so the bank will issue a certificate of blocking of funds which must be presented to the notary as proof. For this step, the final articles of association of the company are not required but it is necessary to present at least a draft of the articles of association.

Drafting and signing the Articles of Incorporation

To register the company, it is indispensable to first draft its articles of association. These must contain essential information such as the name of the company, the registered office, the corporate purpose, the duration of the company, the capital stock and other details. Once they have been drafted, they must be signed privately or before a notary, depending on the type of legal form chosen.

Registration with the RCS

Once the articles of association have been signed, it is necessary to register the company with the Registry of Commerce and Companies, a step that is usually carried out by the same notary. This mandatory registration confers legal personality on the company, officially recognizing it as a legal entity in Luxembourg.

Publication in the RESA

Once registered with the RCS, the incorporation of the company must be published in the Recueil Electronique des Sociétés et Associations, which is the official gazette of Luxembourg where all acts related to companies are published. This publication is a necessary step to make the existence of the company known to the public and to ensure transparency about its incorporation, domicile, share capital and administration. In Luxembourg, the notary is generally responsible for coordinating this publication.

Application for establishment authorization if this is necessary

In certain cases, depending on the type of activity of the company it is necessary to apply for an establishment authorization. This authorization is mandatory for commercial, industrial, and artisanal activities and some self-employed activities. It is possible to enter an establishment authorization request in two ways, either by submitting your establishment authorization request online via MyGuichet.lu, from your professional space. Or by sending a request for establishment authorization by postal mail to the General Directorate PME, craft and commerce.

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How to register a company in Luxembourg

In this article we have explored the possible business opportunities offered by Luxembourg, reviewed the most important sectors and proposed some ideas. We have also analysed legal and administrative aspects, such as the different legal forms available in the country and the process for registering a company in Luxembourg. All this can make things easier, however, this is only the beginning. Entrepreneurship is a complicated task, and we recommend looking more deeply into these and many other aspects to achieve a successful project.