Why choose Luxembourg?
A dynamic economy at the heart of Europe, an attractive tax environment and an exceptional quality of life.
Luxembourg has established itself as one of Europe’s most attractive economic hubs for entrepreneurs, investors and international companies. With one of the highest GDPs per capita in the world, a proven record of political and economic stability (AAA rating), and a strategic location at the heart of the European Union, the Grand Duchy offers a unique environment in which to grow your business.
Beyond its economic strengths, Luxembourg stands out for its business-friendly legal framework, competitive tax system, highly qualified and multilingual workforce, and outstanding quality of life. Whether you are launching a start-up, setting up a European subsidiary or structuring a holding company, Luxembourg brings together all the conditions required for long-term success.
Official Luxembourg economic statistics – 2024
Luxembourg continues to rank among Europe’s leading economies, with exceptional indicators confirming the strength of its economic model. Official 2024 data from STATEC, the CSSF, Eurostat and the IMF show a GDP per capita of €128,131 (the highest in the EU), a AAA sovereign rating confirmed by all international rating agencies, and a financial centre managing €5,820 billion in assets. These figures highlight a resilient, diversified economy with a strong international focus.
GDP per capita and macroeconomic indicators
Luxembourg retains the highest GDP per capita in the world, reaching €128,131 in 2024 according to Eurostat/STATEC, equivalent to USD 137,517 based on World Bank data. In purchasing power standards (PPS), the country records an index of 241 (EU average = 100), i.e. 141% above the European average. This places the Grand Duchy well ahead of all other EU Member States and confirms the exceptional strength of its economy.
GDP growth reached +1.0% in 2024 according to STATEC’s first official estimate, following a contraction of -0.7% in 2023. Inflation remained under control at an annual average of 2.3%, supported in particular by government energy price caps. Public debt remains exceptionally low at 26.3% of GDP (€22.2 billion), making Luxembourg the second least indebted country in the EU after Estonia. The budget balance returned to a surplus of +1.0% of GDP in 2024.
Population, diversity and labour market
Luxembourg’s population reached 681,973 inhabitants as at 1 January 2025 (STATEC), reflecting annual growth of 1.5%. The country is characterised by remarkable diversity: 47.0% of residents are foreign nationals (320,726 people), representing around 180 nationalities. The largest foreign communities are Portuguese (13.1% of the total population), French (7.2%) and Italian (3.7%), illustrating Luxembourg’s strong international appeal.
Luxembourg’s labour market is unique in Europe, with 231,290 cross-border workers in the first quarter of 2024 (IGSS), accounting for 47% of all employees. These workers mainly come from France (53–54%), Belgium and Germany (around 23% each). The unemployment rate stood at 5.9% at the end of 2024 (STATEC/ADEM), slightly up from 5.5% at the start of the year, reflecting a cyclical slowdown in certain sectors such as construction, IT and banking.
AAA sovereign rating and financial stability
Luxembourg is one of only 9–10 countries worldwide to hold an AAA/Aaa rating from all major credit rating agencies. This top rating was reaffirmed with a stable outlook in 2024–2025 by S&P Global Ratings (AAA, 26 January 2025), Moody’s (Aaa, 7 February 2025), Fitch Ratings (AAA, 22 November 2024), DBRS Morningstar (AAA), Scope Ratings (AAA, 24 May 2024) and Creditreform Rating (AAA), as published by the Luxembourg State Treasury.
This outstanding rating reflects the strength of Luxembourg’s public finances: public debt of just 26.3% of GDP, substantial fiscal buffers and prudent economic management. As noted by Fitch Ratings, “low public debt levels and strong fiscal buffers offset the small size of the economy and its inherent macroeconomic volatility.” This recognised financial stability further enhances Luxembourg’s attractiveness for international investors.
Financial centre: investment funds and assets under management
Luxembourg has consolidated its position as the world’s second-largest investment fund centre after the United States and the leading fund hub in Europe. As at 31 December 2024, total net assets of collective investment undertakings (UCIs) reached €5,820 billion according to the CSSF, representing strong growth of +10.12% year-on-year. A total of 3,143 UCIs were registered, including 2,067 umbrella structures comprising 12,523 sub-funds, for a total of 13,599 active fund units.
The banking sector includes 115 credit institutions employing 26,150 people, with total assets of €937.5 billion (CSSF, 31 December 2024). The insurance and reinsurance sector comprises 68 insurance companies and 195 reinsurance companies. In private banking, assets under management amount to €756 billion. Luxembourg accounts for 54.6% of the global market for cross-border fund registrations and dominates 70% of European ELTIFs (European Long-Term Investment Funds), confirming its role as a key international financial hub.
Companies and international tax treaties
Luxembourg has 45,021 active companies according to the publication Luxembourg in Figures 2025 (STATEC, 2022 data). The sectoral breakdown reflects a predominantly service-based economy, with 39,434 service companies (including 10,171 in specialised and technical activities, 7,471 in trade and 4,227 in real estate), 4,569 in construction and 1,018 in industry. In 2022, 4,747 companies were created compared with 3,208 closures, highlighting strong entrepreneurial momentum.
Luxembourg benefits from an extensive network of 85 to 90+ double tax treaties in force, covering more than 95 countries and jurisdictions according to the Luxembourg tax authorities. This network includes recently enacted treaties with Albania, Montenegro, Moldova and Oman (2024–2025). Treaties with Colombia, Ethiopia, Kosovo, Cape Verde and the United Kingdom are pending ratification, while negotiations are ongoing with Chile, Egypt, Mali, New Zealand and Pakistan. This broad treaty network facilitates cross-border operations and reinforces Luxembourg’s tax attractiveness.
Six reasons to establish your business in Luxembourg
Why does Luxembourg attract so many international companies? Beyond its reputation as a financial centre, the Grand Duchy combines economic, tax and human advantages that make it a unique destination in Europe. From its AAA sovereign rating and central EU location to a competitive tax framework and a highly skilled workforce, Luxembourg offers all the conditions needed to support your growth.
Globally recognised stability
Luxembourg’s AAA rating reflects sound public finances and exemplary economic governance. With public debt of around 25% of GDP—well below the EU average—and stable growth, the country provides a secure environment for long-term business development.
A unique strategic location
Located at the heart of Europe, Luxembourg is one of the three official seats of the European Union and hosts major EU institutions, including the Court of Justice of the European Union and the European Investment Bank. This central position offers immediate access to the French, German, Belgian and Dutch markets, representing more than 200 million consumers.
A world-class financial hub
As the world’s second-largest investment fund centre after the United States, Luxembourg manages more than €5 trillion in assets. Its financial ecosystem offers a full range of cross-border financial services connecting global investors and markets, attracting leading international institutions.
A business-friendly tax environment
Luxembourg provides a competitive corporate tax framework, an extensive tax treaty network and attractive special regimes such as the participation exemption and IP box regime. The country is also known for its tax stability and a modern, efficient tax administration.
Access to international talent
With around 170 nationalities represented and more than 200,000 cross-border workers, Luxembourg offers an exceptional talent pool. The workforce is highly skilled, multilingual (Luxembourgish, French, German and English) and internationally mobile, facilitating the recruitment of global profiles.
An attractive living environment for your teams
Luxembourg combines economic excellence with a high quality of life: top-level security, modern infrastructure, a high-performing healthcare system, rich cultural offerings and a preserved natural environment. These advantages support talent attraction and retention while offering an outstanding family-friendly environment and an internationally recognised education system.
Ready to set up in Luxembourg?
From company formation to the full management of your accounting, tax and social obligations, PCG supports you at every stage of your development in Luxembourg.