Business

Why Luxembourg is one of the best places to do business in 2025

With the pace of technology and innovation increasing every year, there is a growing desire to launch something of your own. If you're thinking about doing business in Europe in 2025, Luxembourg could be the place to be. A country with a robust economy, digital initiatives and a good location in the centre of the EU has long ceased to be a purely financial centre. Today, it is a playground for startups, investors and global companies.

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Economic base: stability and growth

Luxembourg suits entrepreneurs because there are no sharp fluctuations. Forecasts for 2025-2026 look very optimistic: GDP growth of 1.7 per cent to 2.0 per cent, moderate inflation and falling unemployment. After slowing down in previous years, the economy is picking up the pace again. For business, this means predictability and favourable conditions for growth.

The Grand Duchy is literally at the crossroads of Europe: Germany, France and Belgium are all close by. From here it is easy to access the largest markets in the EU. Local residents and the business community speak several languages, including English, making international projects and negotiations easy.

In addition, the Authorities actively support start-ups. For example, the Fit 4 Start programme helps early stage companies with funding and mentoring. Fintech, artificial intelligence, healthtech and even space technology are developing here. If you have an innovative project, Luxembourg's ecosystem will provide infrastructure and support.

How to start a company in Luxembourg in 2025

Starting a business here is not difficult, but there are formalities.

Choice of company form. Small and medium-sized businesses often choose S.à r.l. with a minimum capital of €12,000. For larger businesses, an S.A. is suitable, while flexible start-ups can choose SAS, where capital can start from as little as one euro.

Basic Steps:

come up with and verify a unique name through the RCSL business registry;
if necessary, register a trade mark and domain;
prepare the memorandum of association with a notary;
to deposit the authorised capital in a bank account;
register the company in the register and apply for a business licence;
issue tax and VAT numbers;
to open a full-fledged account for work.

From January 2025 there are stricter rules for the business register, so it's worth paying attention to the accuracy of the data in advance.

The tax system in Luxembourg is transparent and quite competitive.

Corporation tax: 14% on profits up to €175,000, 16% for income over €200,000. Including local levies, the effective rate in Luxembourg is usually around 24%.
VAT: standard rate of 17%, reduced rates of 14%, 8% and 3%. The mandatory registration threshold is €50,000.
Other fees and incentives: business tax at the municipality level, property tax, investment credits up to 18%.
New in 2025: an updated regime for visiting professionals (benefits up to €400,000 annual income), flexible employee bonuses and support programmes for young employees.

Business support and infrastructure

Entrepreneurs have access to grants, counselling and accelerators through guichet.lu and the Chamber of Commerce and Industry. For microbusinesses, assistance of €2000 per month for six months is available.

The digital infrastructure here is at a high level: fast internet, modern data centres and services for working in the cloud. This is especially important for international and technological projects.

The financial sector remains the strongest in Luxembourg: investment funds, banks, insurance and fintech. It accounts for more than a quarter of GDP. For businesses, this means access to reliable partners and financing.

Luxembourg in 2025 is a safe, technologically advanced and future-oriented country for business. It combines economic stability, support for start-ups, sophisticated taxation, convenient company registration rules and reliable infrastructure.

And if you are thinking of launching or developing your project in Europe, Luxembourg is one of the best starting points. And routine accounting and tax tasks can be safely entrusted to companies like EasyBiz, so you can focus on what matters most - ideas and business growth.