Luxembourg is one of the world’s smallest countries, located in northwestern Europe. It is surrounded by France on the south, Belgium on the west and north, and Germany on the northeast and east. Luxembourg runs a parliamentary system of government with a constitutional monarch who appoints a prime minister. Luxembourg is the richest country in the world using Gross Domestic Product ( GDP ) as a measure of wealth and is also a founding member of the European Union (EU).
Luxembourg has three official languages, Luxembourgish, French, and German. Maintaining a high standard of living is equally open to foreigners. Rich in culture and diversity, Luxembourg has managed to keep a large foreign population and kept its tourism sector afloat. The economy of Luxembourg is largely based on private banking, steel, and its industrial sector. Being a member of the EU has created a wider market for its export products such as; glass, chemicals, machinery and equipment, steel, rubber products, etc. Luxembourg partners in business with Germany, Belgium, Netherlands, France, Italy, and the United Kingdom. It imports goods such as; commercial aircraft, metals, foodstuffs, luxury goods, etc.
Here are some of the reasons why Luxembourg is open to investors.
Already Existing market
As a founding member of the EU, the trade policy for goods and services has created more room for an open market. The market cut across all European Union member states. Evolving into business with countries like Germany, having the largest economy in Europe has created a Wilder market for the country through its E-commerce. Elimination of Custom duties in bilateral trade thereby creating room for easy import and export of goods and services in the wild European Union’s existing market.
Stable economy
The strong and stable economy of the country has placed it on the front burner of investors’ eyes. The exponential growth of the investment fund sector through the launch and development of cross-border funds. It is a financial powerhouse having a 1.1% inflation rate. Luxembourg runs a mixed economy in which the economy consists of high levels of openness and entrepreneurial activity, combined with centralized economic planning and government regulations. The Luxembourg Euro has also managed to maintain its value against major European currencies. Investors often check a country’s economic risk of collapsing before investing. Luxembourg has managed to stabilize its finances and provided a more reliable investment proof through its sound economy
Diversity of the Luxembourg Economy
The country is a multicultural society. Its diversity was well demonstrated in the adoption of three official languages. One major characteristic of Luxembourg is its large foreign population. The economy of Luxembourg was not left out in the diversity. Diversity provides investors with a very long list of business sectors to venture into. Ranging from banking, steel production, information technology, tourism, agriculture, mining, manufacturing, and processing of both local and innovative products. Diversity coupled with a stable economy has made Luxembourg have a positive outlook in the eyes of investors.
Financial aid/ benefits
Financial aid and benefits are one of the things investors stand to gain in Luxembourg. The GDP of the country is grossly generated. Private banking. The availability of several financial institutions to provide loans and advice to investors has given it a better rating. Also, the government of Luxembourg funds its Economy to improve business opportunities.
Finally, Luxembourg is a positive sight to investors but the high taxation from its government to high international companies has been a major source of concern.
