An attractive financial ecosystem

Banking and finance in Luxembourg: expat guide

Located in the heart of Europe, Luxembourg boasts a high-performance economy. It is particularly renowned for its banks and financial institutions.

When you move to Luxembourg, you need to know what to expect financially. We tell you more here.

Healthy finances in Luxembourg

Once sometimes likened to a tax haven, the country has undergone far-reaching restructuring in recent years. Today, it is highly transparent and strictly applies global compliance standards.

As the second-largest manager of private funds, Luxembourg ranks among the world's best money markets. After the Covid crisis and a difficult year in 2023, Luxembourg should return to annual growth in excess of 2%, driven by the financial sector, which accounts for a third of GDP.

Luxembourg's finances are sound, as evidenced by the triple AAA rating regularly renewed by the main rating agencies.

With an average annual growth rate of 2.1% over the last 5 years, Luxembourg's average growth is 4 times higher than that of the euro zone. While the year 2023 is likely to bring a recessionary trend (-0.4% to November 2023), projections for 2024 look more favorable, with 1.5% growth, and even above 2.3% in subsequent years. 

Luxembourg is highly transparent and strictly applies global compliance standards. As the second-largest manager of private funds, Luxembourg ranks among the world's best money markets.

Luxembourg's economy of the future

Luxembourg's openness rate stands at 168.5%, making it the most open economy in the world. With 2,390 billion euros, Luxembourg is the country receiving the most direct investment, behind only the USA and the Netherlands.

Luxembourg is focusing its strategy on sustainable, competitive economic development, with an eye to the future and the technologies of the future. Its development is clearly focused on digital technology and respect for the environment. Priority sectors include the development of information and communication technologies, healthcare, logistics, intelligent industry 4.0, financial services and space.

More information on banks and how to open a bank account in Luxembourg.

Quality of life for Luxembourg residents

Luxembourg is also described by its residents as a place offering a high quality of life, with high standards.

Overall, the standard of living in Luxembourg is high. In fact, 280 Luxembourg families are classified as "UHNWI" (ultra high net worth individuals), with fortunes in excess of $30 million. 7% of the population has assets in excess of $1 million.

Luxembourg's GDP per capita is one of the highest in the world, at $90,900 in 2023, according to the World Bank.

However, according to the latest figures, 19% of the population is affected by poverty in the country. The poverty line in the Grand Duchy is set at less than 2,177 euros per month. Find out more about minimum wages in Luxembourg.

Household finances and cost of living

Living in Luxembourg meansopening a local bank account to manage your finances and receive your wages and other income, such as family allowances.

Almost half of government spending is financed by direct taxes, such as income tax. In contrast to many other countries, almost all personal income is subject to taxation.

Salaries in Luxembourg are higher than the European average, and more particularly than the other components of the Grande Région. Nevertheless, the real cost of living in the Grand Duchy of Luxembourg needs to be put into perspective.

Housing prices are comparable to those in London and Paris. In some areas of Luxembourg City, prices per m² reach 15,000 euros or more.

Here too, food and clothing costs are higher than in neighboring countries.

Conversely, some products are less expensive, such as alcohol, tobacco, fuel and, more recently, vehicles. Value-added tax is 17%. Find out more about shopping in Luxembourg.

Luxembourg, a country for millionaires?

According to Capgemini's "World Wealth Report", Luxembourg has proportionally more millionaires than its two neighboring countries, France and Belgium.

In fact, around 7% of the population are millionaires. Most of them are estimated to have a fortune of between $1 and $5 million. 280 people have a fortune in excess of $30 million.

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