STARTING A BUSINESS IN LUXEMBOURG

In addition to the political and social stability, Luxembourg, one of six founding members of the European Union (“EU”), provides its residents with one of the highest living standard in the world. Luxembourg gross domestic product per inhabitant ranks Luxembourg ahead of Switzerland, the United States, Japan, or the United Arab Emirates.

The population of Luxembourg is very international, work forces speak many different languages (e.g., French, German, Luxembourgish, English, and Dutch), and the tax and social environment is very competitive.

TAX ADVANTAGES

Social contribution rates as of January 1, 2011 are of 13% of the wages (employee share) and 12.61 % (employer share). The employer should add accident insurance contributions (single rate of 1.15%) and mutual insurance fund contributions (which varies from 0.62% to 2.38% according to the contribution category).

Luxembourg companies are subject to corporate income tax (and municipal business tax) of about 29% in Luxembourg City, as well net wealth tax of 0.5%. Corporate income tax, municipal business tax, and net wealth tax benefits, however, from many exemptions related to the holding of participations. Luxembourg companies benefits as well from a vast treaty network. Moreover, e-commerce activity is favored for companies wishing to establish their headquarters in Luxembourg.

Contrary to neighboring countries, Luxembourg does not collect any professional tax, apprenticeship tax, housing tax or “CSG.” The maximal applicable VAT rate is 15 %.

Individual Luxembourg residents also benefit from a very attractive tax system with:

• No tax on personal wealth.
• 10% taxation at source on interest income
• Profitable system for other savings income
• Compensation for negative real estate revenue made possible by offsetting other types of revenues
• No inheritance taxes between husband and wife or partners under certain conditions, as well as favorable rates
• Favorable gift tax rates (1.8% to 14.4%).

Ranked among one of the most dynamic financial markets, the Grand Duchy of Luxembourg today is recognized as the high street for funds management because of the active and pragmatic interaction between the financial industry and public services

Concerned with preserving the privacy of individuals and the confidentiality of personal information, Luxembourg requires businesses such as banks or insurance companies to respect strict confidentiality.

A PLEASANT AND MULTICULTURAL ENVIRONMENT

Luxembourg offers a diverse range of cultural and sporting opportunities, along with excellent international connections by rail, road, and air. Luxembourg City can also boast being one of the safest cities in the world (according to a recent international survey).

With a multicultural population, the country offers education with an international orientation.

The educational system is mainly based on the three official languages (French, German, and Luxembourgish). English, however, has become a key language to the educational system.

This multi-lingual and multi-cultural environment provides Luxembourg with the keys to the success of the Grand-Duchy.