With the growing pace of technologies and innovation, it’s just tempting to start something of your own. If you’re looking to launch or grow a business in Europe in 2025, Luxembourg might just be your sweet spot. Having a strong economy, digital-friendly policies, and being situated in the heart of the EU, the Grand Duchy is now more than just a financial hub — it’s a thriving base for startups, investors, and global companies.
Let’s look deeper and walk through why Luxembourg is a top choice from different perspectives when it comes to running your business.
Why choose Luxembourg for business?
Luxembourg isn’t just all about banks and finance anymore, despite its historic reputation. Still, the finance sector is huge here, but the country has evolved into a magnet for tech startups and initiatives and entrepreneurs with fresh ideas. If you’re planning your next business move, Luxembourg deserves a serious closer look.
📈 Economic stability and growth (2025-2026 outlook)
If we take a look at the 2026 direction, Luxembourg’s economy is looking pretty solid. Both STATEC and the European Commission expect a boost in GDP, which is pretty healthy after a slower patch. Increased capital flows and stronger consumer confidence are helping all that to happen, thanks in part to a wage adjustment that kicked in back in May 2025.
| Indicator | 2025 forecast | 2026 forecast |
| GDP growth | 1.7% | 2.0% |
| Inflation rate | 2.1% | 1.8% |
| Unemployment | 6.6% | 6.4% |
Simply put, this is a supportive economy with good business fundamentals.
📍 Strategic location and market access
Luxembourg is situated in the heart of Europe, bordered by Belgium, France, and Germany. That makes it a natural starting point for companies wanting easy access to major EU markets. Plus, most people here speak multiple languages such as Luxembourgish, French, German, and English, so doing business across borders is refreshingly smooth.
🔬 Innovation and digitalisation initiatives
Tech lovers, especially, would appreciate this one: Luxembourg’s got a strong innovation streak, since government programs like Fit 4 Start offer funding and hands-on support for early-stage startups. The country’s pushing forward in fintech, AI, healthtech, and even space tech.
If you’re building something futuristic or just high-tech, this ecosystem’s got your back. Check out stories about AI startups and women-led startups based in Luxembourg to get inspired.
Navigating business incorporation in Luxembourg
Starting a company here isn’t rocket science thanks to easy-to-follow rules, but you do need to follow them and some formal steps. Here’s how to get things rolling in 2025.
Choosing the correct legal entity
First things first: picking the right company structure.
| Legal form | Min. capital | Liability | Best for |
| S.à r.l. | €12,000 | Limited to capital | SMEs, small investors |
| SA | €30,000 | Limited | Large firms, public listings |
| SAS | €1 | Flexible | Startups, flexible structures |
| SCS / SCSp | None | Varies | Investment funds |
You can check out our guide on forms of business in Luxembourg for more information.
Key steps for incorporation in 2025
Here’s what the process looks like step by step:
1️⃣ Pick a unique business name
Make sure no one else is using it, before locking in a business name, make sure it’s not already taken or too similar to an existing one:
- Search the Luxembourg Business Registers (LBR)
- Visit the RCSL search page (Registre de Commerce et des Sociétés Luxembourg)
- Use the search function to look up the name you're considering.
2️⃣ Check trademark availability (optional but smart)
If your business name will also be your brand, it's a good idea to check trademarks too:
- Use the Benelux Trademark Register (BOIP) for local protection.
- Or check EUIPO if you want to cover all of Europe.
3️⃣ Consider domain availability
Not legally required, but you'll probably want a matching domain name. Check domain registrars like GoDaddy or Namecheap to see if the .lu or .com version is available.
4️⃣ Prepare a notarial deed
A notarial deed (also called a deed of incorporation) is a formal legal document that officially establishes your company. It must be prepared and signed in the presence of a Luxembourg notary.
Most company types, like S.à r.l., S.A., or SAS, are required to have one.
5️⃣ Deposit your share capital
The steps include choosing a local bank in Luxembourg, preparing required documents, opening a blocked capital account (with depositing from €1 for an SAS to €30,000 minimum for an S.A.), getting a capital deposit certificate, and, finally, unlocking your account.
6️⃣ Register with the RCS
That’s the official trade register.
7️⃣ Apply for a business permit
Especially important for commercial activities.
8️⃣ Get your VAT and tax numbers
A must for any active business.
9️⃣ Open a business bank account
Final step before you’re official.
If you need help with this, you can explore company formation services in Luxembourg with Easybiz.
Taxation landscape for businesses in Luxembourg (2025)
Luxembourg tries to stay fair and transparent when it comes to its tax system. Here’s what to expect in 2025.
Corporate income tax (CIT) in 2025
Here’s how CIT breaks down this year:
- 14% on income up to €175,000
- €24,500 + 30% on income between €175,000 and €200,000
- 16% for anything over €200,000
Add in local taxes, such as the municipal business tax and employment fund, and your effective tax rate in Luxembourg City is approximately 23.87%. There’s also good news for small businesses — the minimum net wealth tax has been simplified.
Dive deeper into corporate taxation in Luxembourg.
Value added tax (VAT) in 2025
- Standard VAT rate: 17%
- Reduced rates: 14%, 8%, and 3% (depending on the goods/services)
- Registration threshold: €50,000 (for local businesses)
And yes, if you're dealing with cross-border services, you’ll need to apply reverse charge mechanisms.
Other key taxes and incentives
- Municipal business tax: Varies by location
- Net wealth tax: 0.5% up to €500M; 0.05% beyond
- Investment tax credits: Up to 18% for eligible business assets
- Company registration fee: €75
Additionally, Luxembourg has double tax treaties (DTTs) with over 80 countries, including a new one with Colombia, which will take effect from 2026.
New for 2025:
- Impatriate tax regime update: 50% exemption up to €400,000 gross salary
- Profit-sharing bonuses: Now more flexible
- Young employee bonus: Aimed at encouraging youth employment
Want to skip the number crunching? Explore our tax advisory services to stay focused on your business.
Essential legal and regulatory frameworks
Luxembourg’s legal framework is business-friendly yet provides robust protections.
⚖️ Employment law in 2025
Wages went up in May 2025, and new rules (based on the EU mobility directive) now offer better protections for employees during mergers and restructuring.
Businesses are now required to:
- Provide detailed employee reports
- Respect stronger consultation rights
- Offer safeguards during reorganisations
🛡️ Data protection and cybersecurity (2025 trends)
GDPR compliance is strictly enforced, and with the AI Act now in effect, companies using AI tools must adhere to new transparency and risk-management rules.
Cybersecurity is no longer optional, as it’s a part of staying legally compliant.
🌐 Intellectual property protection
Got a great logo, app, or product idea? Protect it. Registering trademarks, patents, and copyrights in Luxembourg is pretty straightforward and a smart move.
Supporting your business growth: connectivity and ecosystem
Luxembourg’s supportive ecosystem is really helping businesses grow.
The financial services sector
Luxembourg is a major player in finance, particularly in the realm of investment funds. It's also strong in banking, insurance, and, more recently, fintech.
In 2025:
- Finance contributes over 25% of GDP
- The CSSF keeps the sector regulated and stable
Business support and incentives
Through platforms like guichet.lu and the Chamber of Commerce, startups can tap into:
- Grants (e.g., €2,000/month for 6 months for micro-businesses)
- Expert advice and coaching
- Access to local incubators and accelerators
Reliable business connectivity
Luxembourg punches above its weight in terms of digital infrastructure — fast internet, top-tier data centres, and strong support for cloud services are an excellent base for remote or tech-driven teams.
Here’s what that translates to:
- Smooth international ops
- Secure, always-on communication
- Growth powered by digital tools
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Learn moreConclusion
Luxembourg is surely thriving, being a future-ready and ideas-supporting place to start or scale your business in 2025.
Whether you’re a startup founder or an investor eyeing Europe, Luxembourg can offer you:
- A strong, predictable economy
- Startup-friendly tax policies
- Easy incorporation process
- Great digital infrastructure
- Solid legal and employment protections
And Easybiz is here to help you focus on ideas, taking away all the routine admin tasks that drain the creative founders’ energy.
