Considerations when deciding to establish a company in Luxembourg

LPG luxembourg : considerations for company establishement


The Grand Duchy of Luxembourg offers a high standard of living, with a minimum gross salary of 2,000 EUR per month. The cost of labor remains competitive in terms of employer's contributions (about 12%).
With a low unemployment rate (about 6% of the active workforce), recruiting qualified employees it not an easy affair in Luxembourg. Often, companies must recruit along the country's borders to expand the pool of affordable and available workforce. 
The real estate market in Luxembourg is surging, with the average price per m2 steadily rising. Most industrial or semi-industrial businesses avoid Luxembourg City and prefer the rest of the country which is more affordable and the appropriate workforce resides. 
A business license must be obtained from the General Directorate for SMEs and Entrepreneurship to carry out professional activities in the Grand Duchy. Obtaining a business license is tied to 'fit and proper' criteria, training, diplomas, professional experience and infrastructure. It may take certain activities several weeks to obtain a license which can be a hindrance to production or commercialization. Therefore it is important to take the timing for licensing into consideration when establishing a company in Luxembourg. 
Luxembourg has positioned itself as one of the premiere financial centers of Europe and is reticent to support nascent business activities by startup companies. It is therefore very important, for a project which requires large amounts of capital to have on hand a relatively substantial equity capital.