The attractive ecosystem of Luxembourg
The Grand Duchy of Luxembourg is a small country located in the center of Europe. Despite its small size, it has a strong economy. Luxembourg is particularly known for its banks and financial institutions.
Once sometimes referred to as a tax haven, the country has been undergoing profound restructuring for several years. Today, it is highly transparent and strictly follows global compliance standards.
Luxembourg is also described by its inhabitants as a place offering a high quality of life, with high standards.
Future-proof economy and sound finances
Luxembourg is the second largest private fund manager and one of the best money markets in the world. After the Covid crisis, Luxembourg has returned to annual growth of over 5%, 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.
In 2021, the growth rate is 7%. With an average growth rate of 2.1% per year over the last 5 years, Luxembourg’s growth rate is 4 times higher than that of the euro zone. Nearly half of government spending is financed by direct taxes, such as income tax. In contrast to many countries, almost all personal income is subject to taxation.
Luxembourg’s openness rate is 168.5%, making it the most open economy in the world. Luxembourg appears as the country receiving the most direct investments with 2,390 billion euros, behind the United States and the Netherlands.
Luxembourg is orienting its strategy towards an enduring and competitive economic development, turned towards the future and the technologies of the future. Its development is clearly focused on digital technology and respect for the environment. The priority sectors are the development of information and communication technologies, health, logistics, smart industry 4.0, financial services and space .
Quality of life of Luxembourg residents
Overall, the standard of living in Luxembourg is high. More than 400 Luxembourg families are classified as “UHNWI” (ultra high net worth individuals), with a fortune of more than 30 million dollars. Luxembourg’s GDP per capita appears to be the highest in the world with 117,500 dollars per capita in 2020 according to the World Bank. The latest IMF figures even predict a GDP per capita of 131,300 dollars for Luxembourg, well ahead of Ireland with 102,390 dollars and Switzerland with 93,250 dollars in 2021.
In addition, it is estimated that in 2020 more than 17% of the population is affected by poverty in the country. The poverty line in the Grand Duchy is set at less than 1,804 euros per month.
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 must be put into perspective.
Housing prices are comparable to those in London and Paris. In some areas of Luxembourg City, prices per square meter reach 15,000 euros or more. Food and clothing costs are also higher than in the surrounding countries.
On the other hand, some products are cheaper, such as alcohol, tobacco, fuel and, more recently, vehicles. The Value Added Tax is 17%.
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