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Startup in Luxembourg: relocation for entrepreneurs and ecosystem for innovative business in 2024

Thinking to start a company in Luxembourg? Read everything about it in this article, from residency and relocation to support options and local business etiquette.

Last time updated
11.06.24

Luxembourg has grown beyond its status as a banking powerhouse and is aiming to become a Silicon Valley of Europe. Today, it offers a vibrant environment for startups with a supportive ecosystem, favorable tax regulations, and strategic geographical location to expand to the markets of Belgium, France, Germany and more. If you're an entrepreneur considering starting your venture in Luxembourg, this article will tell you where to put your leg and how to start.

Why is Luxembourg great for startups?

Located in the center of Europe, Luxembourg offers many advantages. As a multilingual country, Luxembourgish, French and German are the official languages and English is very commonly spoken, it is a perfect place to set up an international business environment.

Fast development

In less than 20 years, Luxembourg developed itself as a leading place for innovative, fast developing international startups, with stimulating regulations which support the business ideas of startups.

Globally connected economy
Favorable tax system for companies
Infrastructure for digital businesses
High quality of life
Take a train

An extra advantage for people moving to Luxembourg, is the fact that they can easily explore the rest of Europe due to its central location. Places like Paris, Amsterdam, Brussels, Frankfurt and the Alps are not far away.

Luxembourg is usually in the top of rankings about the quality of life. Common in the mentioned rankings are the topics about the number of paid vacation days, healthcare, extensive paternity leave, affordable childcare, and education.

3rd in the Global 150 Cities index
Across cities around the world that have the best mix of high salaries, affordable costs of living and low taxes, which assumes the quality of life.
5th globally to raise a family
According to the Website Asher & Lyric, in 2021 Luxembourg performed particularly well in the safety, cost and time categories.
16th in Mercer’s 2023 Quality of Living
It assesses the practicalities of daily life for expats and their families worldwide.In 2019 Luxembourg was named the safest city by safety ranking.

Local startup ecosystem — hubs, incubators and accelerators

The Luxembourg startup ecosystem provides complete and reliable support to aspiring entrepreneurs from different countries at any stage of startup development: from the pre-seed stage (a business idea) to seed and growth (financing and launching). The entry to the startup stage in the country is usually done with the support of one of the players in the ecosystem. It is important to establish a communication and be a resident of the incubator or support program in Luxembourg before applying the documents, especially if your startup is at a pre-seed stage, this can help with the documents.

In 2023, the Luxembourg startup ecosystem showed great results according to the Global Startup Ecosystem Index. Luxembourg has reached the 34th position in the global top 40 nations, advancing 6 steps. In Western Europe, Luxembourg City rose 18 places to become the 30th best city for startups. This is just another confirmation of the brilliant future for the Luxembourg startup ecosystem.

540+
verified startups
16
accelerators and incubators
19,000+
employees in 2023
240
million euros VC investments in 2023
Startups in Luxembourg statistics 2024
Source: Main application sectors and other data, from Startup Luxembourg website

Fit4start program in Luxembourg

The Fit4start program is an opportunity for innovative startups from any country in the world to receive solid financial support up to 150,000 euros, get free access to coworking space and meet potential partners and investors.

The Fit 4 Start program is designed to solve the three main problems of any startup:
finding funds
entering the market
growing a team

Over the course of 6 months, program participants undergo intensive training under the guidance of experienced coaches. Classes are conducted both in groups and individually, taking into account the characteristics of a particular startup. An additional bonus of the program is regular consultations with members of the Fit 4 Start jury, which includes well-known entrepreneurs, business experts and investors.

Fit 4 Start is designed for innovative digital companies in the fields

  • FinTech and RegTech,
  • Logistics & Supply chains,
  • Industry 4.0 & Manufacturing, 
  • CleanTech, 
  • EcoTech & Energy,
  • Cybersecurity,
  • HealthTech,
  • Space ventures.

The program provides startups with all the necessary support and tools needed to increase their chances of successfully entering the market not only in Luxembourg, but also in other EU countries.

In total, more than 145 startups from 90 countries around the world have been trained in the Fit 4 Start program to date.

Yes, we won this competition. Out of 650 applications, 5 were selected, and we were one of them. It must be said, though, that the conditions there are quite tough. Luxembourg is a fairly wealthy country that can afford to give out 150 000 euros to start-ups under certain conditions. Acting as a venture investor, the Grand Duchy hopes that at least a few projects will shoot to the stars. Out of 10 start-ups, 8 die, 2 develop steadily and 1 of those 2 becomes successful and makes a tenfold or even a hundredfold profit.
Alex Pospekhov, entrepreneur and co-founder of MissionSpace

Alex Pospekhov, entrepreneur and co-founder of MissionSpace

Read full interview
Requirements for startups participating in the Fit4start program
Check your eligibility for Fit4start
Click on the necessary requirements, if you fulfil them.
*The mandatory items are marked with red asterisks.
Have a startup or a potential idea
Any startup at an early or advanced stage can participate in the program.
Enter at the early stages of projects
At the stage of applying for participation in the program, the applicant is not required to create a company, but if one already exists, then its age from the date of opening should not exceed five years.
Identify as SME
The registered company must meet the small enterprise criteria: has less than 50 employees and a turnover or balance sheet under €10 million annually.
2 people working at the project
The team of a potential program applicant must consist of at least two people.
Age of majority
The applicant's age at the time of application must be at least 18 years.
Check your eligibility for Fit4start
Click on the necessary requirements, if you fulfil them.
*The mandatory items are marked with red asterisks.
Deadlines for application

Applications for participation are usually accepted in the summer, from late June to mid-August. Pitching sessions are held in September and October, followed by the selection of the 20 participants. The program itself starts in mid-January.

Government startup support, other incubators and accelerators

The big advantage is that startups in Luxembourg can receive support not only from private investors but also from institutional organisations. The Grand Duchy offers aspiring entrepreneurs a wide range of programs, incubators and accelerators in different areas. Like the Fit4start program, that we have previously mentioned, these incubators and programs offer financial support to the projects in Luxembourg.

House of Startups
House of Startups in Luxembourg is a large campus which integrates innovation hubs, experts and corporates. It is created by the Luxembourg Chamber of Commerce with the support of the Luxembourg Government. Its 6,000 m2 area can accommodate up to 200 startups. Today, several large incubators and accelerators are already operating there.
Visit the official website
Luxembourg House of Financial Technology (LHoFT)
Specialises in helping FinTech start-ups. It provides comprehensive support to start-up companies, which includes coaching, promotional activities, assistance in finding clients and Luxembourg startup funding. In addition to equipped workplaces, incubator residents have the opportunity to communicate with experts from leading entrepreneurs from Luxembourg.
Visit the official website
Luxembourg-City Incubator (LCI)
Launched in 2017, LCI has supported over 170 startups. They've also helped these startups secure more than €100 million in funding and host over 100 events annually. They support startups in six areas: environment, urban tech, construction real estate, retail, tourism, and logistics. Startups in Luxembourg are provided with workspace and a 12-week support program: master classes, participation in community and partner events, individual support, a bootcamp and more.
Visit the official website
Le Village
Le Village by Credit Agricole is located in the House of Startup Luxembourg and operates with the support of five reliable partners – Amundi Luxembourg, CALI Europe, CA Indosuez Wealth Europe, CAMCA Assurance, the Luxembourg branch of CACEIS Bank of the Crédit Agricole group. The goal of the accelerator is to help startups in different areas to build their businesses and stimulate the regional economy. Le Village offers conferences, master classes, expert consultations, workspaces and the opportunity to search for investors.
Visit the official website
Nyuko
A non-profit institutional organisation that provides support to aspiring entrepreneurs. The company offers online training courses in four programs: Newcomer, Freelance, Business plan, Side business. Participants are trained by leading businessmen and coaches from different countries, and in addition receive monthly financial payments. To be eligible to participate, you must have a well-thought-out business plan or an existing business for at least three years, reside in one of the countries participating in the program, and have a strong motivation.
Visit the official website
Technoport
The incubator has been operating since 2012 and offers its support to technology-oriented startups. Work is carried out under two programs: the Challenge program is designed for those who are just starting to develop their business idea with the duration of this free program for 4 months; while Launch & Grow is designed for 3 years and is focused on innovative startups. To take part, you must pass a selection process and pay a monthly fee during the training process.
Visit the official website
Accredited incubators and ecosystem players

Take a look at the complete list of incubators and accelerators available in the Luxembourg startup ecosystem on the page of StartupLuxembourg.

Startup visa and business permit for entrepreneurs

To be able to start a company and to live in Luxembourg, the government should acknowledge that you are allowed to enter the country and settle down. For that you will not only need to apply for a business permit to have access to the commercial activity, but to also register the company and apply for a residency.

No startup visa for startup founders!

Luxembourg doesn't currently offer a dedicated startup visa. Instead, aspiring foreign entrepreneurs from outside the EU, Iceland, Norway, Liechtenstein, and Switzerland should apply for a visa for independent workers (travailleur indépendant). This visa functions similarly to a startup visa, allowing you to live and work in Luxembourg to launch your business.

Conditions for EU citizens
Procedure for third-country nationals

After the common steps the last step will be to apply for residence permit for self-employed nationals of a third country. The applicant has to apply in person for the authorisation to stay, but it is allowed to give a mandate to a third party to take care of the necessary procedures.

Business permit for a startup and innovative business

In Luxembourg, anyone looking to run a business, be it commercial, craft-based, or even a liberal profession, needs a business permit. The application process is the same for both self-employed individuals and companies.

  1. CV, qualifications and business plan

    Collect the documents which show the person applying is qualified to execute the planned activity in a professional way, and when necessary can be registered in the relevant professional register in Luxembourg or the EU.

  2. French language and lawfulness

    Make sure the documents are aligned with the requirements set by law to be able to work in the chosen industry and certain liberal professions. If you have company documents such as draft articles of association or list of stakeholders, for some types of companies, they must be notarised by a local notary.

  3. Proof of financial stability

    Submit documents that prove you have enough resources to do the desired activity (about 20,000 euros in your account), as well as the non-bankruptcy statement. For example, in Luxembourg you can become bankrupt only once, so you need to provide an affidavit from your country of residence or any other certificate.

  4. Support and benefits for Luxembourg

    The planned activity should provide an additional benefit, in social or cultural ways or as an economical benefit. This can be proved by association with the ecosystem players, such as incubators and programs, or in any other way.

Business
Startup
Luxembourg

Read more details about the business permit in Luxembourg

Relocating to Luxembourg as an entrepreneur and what to expect

With nearly half of its population born outside of Luxembourg, integration in Luxembourg can be very smooth. Although there are no strict traditions or rules, there are some nuances that you might want to pay attention to.

Luxembourg is a country with one of the best work-life balances

Employees are provided with well-paid vacation, maternity leave and even paternity leave. The minimum annual leave is 25 days. In addition, the country has 13 official public holidays, which are also non-working days.

A typical workweek is 40 hours with an eight-hour workday. Overtime on weekends and holidays is always compensated. For work on weekends, the additional payment is up to 70% of the salary, working at night – an additional 15%, and on holidays – 100% per hour.

Culture, business and social etiquette in Luxembourg

Moien!
Luxembourg has three official languages: Luxembourgish, French and German. French is spoken by about 98% of the population. It is mainly used to communicate in everyday life: at work and in cafes and shops. All laws and official documents are available in all 3 languages. Although English is not an official language, it has become a main language in the business world. About 80% of Luxembourgers do speak English.
Regional differences
Luxembourg is a small country, but there are clear regional differences. The northern and southern regions have different traditions and speak different dialects. In the South, the influence of French is stronger, in the north, the influence is mainly from German.
Meeting and greeting
In Luxembourg, it is customary to greet each other with a handshake. In formal meetings, it is recommended to use last names and titles (if available). Calling by first name is appropriate in an informal setting. The style of communication in Luxembourg is encouraged to be restrained, without showing excessive emotions. It is better not to discuss personal issues.
Boose with no buzz
Drinking alcohol is considered quite acceptable in the country, but it is better to avoid getting heavily intoxicated in public places, (unless it is a startup afterparty! Work hard means party hard.)
At work
Business meetings are always formal; punctuality and high professionalism are highly valued. At the beginning of the meeting, it is customary to exchange business cards and engage in short small talk. Knowledge of the Luxembourgish language will be a big plus.
Wardrobe
At work, it is appropriate to dress in a business style. For men – a suit and tie, for women – a formal dress or suit with a skirt. Jeans, sneakers and sweaters are not welcome in the office.
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faq

Frequently Asked Questions (FAQ)

How much money do I need to start a business in Luxembourg?

Is English widely spoken in the Luxembourg business community?

What are the main challenges faced by expat entrepreneurs in Luxembourg?

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