Guidance

Exporting to Luxembourg

Published 21 June 2016

Managing risk

Find out how UK companies can control risks when doing business in Luxembourg.

Export opportunities and advice

Find more export advice and explore opportunities overseas on great.gov.uk.

1. Luxembourg export overview

Luxembourg is a member of the European Union (EU) and ranks 19th in the World Economic Forum’s Global Competitiveness Index 2014 to 2015.

Contact a DBT Luxembourg export adviser for a free consultation if you’re interested in exporting to Luxembourg.

Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Luxembourg.

Luxembourg hosts the EU’s financial and legal institutions. It is also the European headquarters for Amazon, PayPal and Skype.

Benefits for UK businesses exporting to Luxembourg include:

• English widely used as business language
• 2 hours to travel from London to Luxembourg
• identical standards and work procedures to the UK in the finance sector

Strengths of the Luxembourg market include:

• strong Intellectual Property (IP) protection
• open economy
• diversified international community
• high household income
• solid legal and regulatory framework

Read the EU’s practical guide to doing business in Europe.

2. Challenges

Doing business in Luxembourg is very similar to doing business in the UK. If your product or service is successful in the UK, there’s a good chance you’ll be successful in Luxembourg. At present there are no major challenges to UK companies.

3. Growth potential

3.1 Economic growth

Luxembourg has low public debt and a high standard of living.

Luxembourg’s Gross Domestic Product (GDP) grew 5.6 % in 2014. Growth of 3.5% to 4% is expected for 2015 and 2016. A rate slightly below 3% is forecast for 2017 to 2019.

2014 growth was mainly fueled by:

• upturn in financial sector activities
• resilience of information and communication services
• the Value Added Tax (VAT) increase (from 15% to 17% in January 2015)

Luxembourg’s priority sectors for economic development include:

• logistics
• banking
• automotive components
• Infomation and Communcation Technology (ICT)
• life sciences
• green technology
• industry and innovation
• shipping
• space industry

3.2 Trade agreements

Luxembourg is a member of the European Union (EU) and the World Trade Organization (WTO). Goods manufactured in the UK are exempt from import duties.

Contact the SOLVIT team if you have market access issues relating to the operation of the Single Market.

4. UK and Luxembourg trade

The total exports of goods from the UK to Luxembourg in 2014 was £213 million. The trading relationship between Luxembourg and the UK is strong and friendly.

Top UK exports to Luxembourg include:

• materials
• automotive equipment
• aircraft equipment
• machinery and mechanical appliances
• chemical products
• animal products
• textiles
• optical, photographic and cinematographic equipment
• medical instruments

5. Opportunities for UK businesses in Luxembourg

Department for Business and Trade (DBT) provides free international export sales leads from its worldwide network. Search for export opportunities.

Access high value public procurement notices via Tenders Electronic Daily (TED). TED contains all procurement notices above a certain threshold from the EU and European Economic Area (EEA).

5.1 Financial services

The financial services sector in Luxembourg is mainly operated on an international level. It offers new financial products and services. Luxembourg is the largest private banking finance centre in the Eurozone and the largest cross-border distributor of investment funds.

Opportunities for UK companies include:

• ICT
• project management
• consultancy
• training

Contact Thomas Flammant for more information on financial services opportunities in Luxembourg.

5.2 ICT and e-commerce

Luxembourg is the European headquarters of international e-commerce companies such as:

• eBay
• PayPal
• Amazon
• Skype

Luxembourg is investing heavily to be become a world leader in The Cloud. It has created a park of 8 data centres which are among the top twenty worldwide.

Opportunities for UK companies include:

• project management
• software
• training

Contact Thomas Flammant for more information on IT and e-commerce opportunities in Luxembourg.

5.3 Logistics

As a major European air cargo hub, Luxembourg is keen to expand this sector. It is looking for new innovative operations.

Freeport is a new project to offer duty-free storage facilities for valuables such as art.

The government is planning to invest in a new multi-modal logistic hub in the south of the country.

Opportunities for UK companies exist in:

• maintenance and servicing of aircrafts
• security for high value storage
• project management
• ground equipment for aviation

Contact Thomas Flammant for more information on logistics opportunities in Luxembourg.

5.4 Security

NATO has based its main procurement and supply agency in Luxembourg.

The DBT team in Luxembourg are regularly organising events to introduce the British industry. In 2015 Luxembourg will assume the Presidency of the European Ministers Council. This event will generate business opportunities which will be published by the DBT.

Opportunities for UK companies include:

• products for police
• ground equipment for infantry
• special security products specific to prison

The Export Control Organisation (ECO) issues licences for the export of strategic goods. You must check your goods you are meeting legal requirements for export.

Contact Thomas Flammant for more information on security opportunities in Luxembourg.

6. Start-up considerations

Luxembourg is a founding member of the EU. European business practises and standards generally apply.

There are a number of ways to export directly to Luxembourg:

• appoint a distributor
• appoint a local agent or local representative
• enter joint venture partnerships
• set up owned or partly owned subsidiaries

The Chambre de Commerce offers more information about types of businesses and procedures for opening them.

All companies have to register at the Luxembourg Companies House.

Luxembourg for Business provides information on the two main types of companies: Sociétés Anomymes or Sociétés à Responsabilité Limitée.

If the company is operating in a regulated market it should apply for a business permit at the Luxembourg Ministry for Economy.

7. Legal considerations

The legal framework for companies in Luxembourg is based on Continental Commercial Code.

The main regulators in Luxembourg are:

• Office Luxembourgeois de Regulation: responsible for electronic communication, electricity, gas, transport and postal service regulation
• Commissariat au Contrôle du Secteur Financier: finance sector control and regulation body
• Commissariat aux Assurances: insurance sector control and regulation body
• Commissariat aux Affaires Maritimes: ship registration and certification body

Contact the DBT team in Luxembourg to help find tax and legal advisers before entering into agreements.

7.1 Standards and technical regulations.

Products and packaging should meet EU standards.

The authority for standards and regulations in Luxembourg is the Institut Luxembourgeois de la Normalisation (ILNAS).

Marking and labelling requirements in Luxembourg are based on the EU directives implemented in Luxembourg law. You should provide all users’ information in at least French and German.

7.2 Intellectual Property (IP)

Trademarks, designs, patents and copyright are the principal forms of IP protection available to companies and individuals. IP law, especially for patent protection, is not totally harmonised within the EU.

Luxembourg has been proactive in developing its IP standards and participates in all the major IP treaties and conventions, including the:

• Bern Convention
• Patent Cooperation Treaty (PCT)
• Paris Convention
• Patent Law Treaty (PLT)
• Madrid Agreement and Protocol

The country is a signatory of the European Patent Convention, which was set up by the European Patent Office (EPO).

Luxembourg IP offers more information on how the authorities have created a safe IP environment.

A Benelux trademark or design can be applied for. This protection covers Belgium, the Netherlands as well as Luxembourg. Applications can be made online at the Benelux Office for Intellectual Property.

8. Tax and custom considerations

8.1 Value added tax

The general rate of VAT in Luxembourg is 17% as of August 2015. This rate is among the lowest in Europe. Some products and services have reduced rates. You can find the exact breakdown of taxes from the offical government portal.

Check with HM Revenue and Customs (HMRC) regarding VAT refund of business expenses incurred in Luxembourg.

8.2 Corporate tax

The corporate tax rate in Luxembourg is between 20 to 21%.

8.3 Income tax

The rate of the taxation is proportional to the income earned with a maximum rate of 39%. As the system has different calculation options dependent on individual status, rates will vary.

8.4 Customs

The internal market of the European Union is a single market which allows the free movement of goods and services. Therefore no import duties are applicable.

8.5 Documentation

Goods in free circulation within the EU can move between member states without being subject to any documentation requirements.

9. Entry requirements

EU residents do not require a visa to enter Luxembourg, but are advised to travel with a valid passport.

9.1 Travel advice

If you’re travelling to Luxembourg for business, check the Foreign and Commonwealth Office (FCO) travel advice beforehand.

10. Contacts

Contact the DBT team in Luxembourg for more information and advice on opportunities for doing business in Luxembourg.