An attractive financial ecosystem

Located in the heart of Europe, Luxembourg has a strong economy. It is particularly renowned for its banks and financial institutions.

When you move to Luxembourg, it is important to know what to expect in terms of finances. Find out more here.

Sound finances in Luxembourg

Once sometimes considered a tax haven, the country has undergone profound restructuring in recent years. Today, it demonstrates a high degree of transparency and strictly applies global compliance standards.

As the second-largest private fund manager, Luxembourg is one of the best money markets in the world. After the Covid crisis and a difficult year in 2023, Luxembourg is expected to return to annual growth of over 2%, driven by the financial sector, which accounts for a third of GDP.

Luxembourg's finances are healthy, as evidenced by the triple AAA rating regularly renewed by the major rating agencies.

With an average growth rate of 2.1% per year over the last five years, Luxembourg's average growth is four times higher than that of the eurozone. While 2023 is likely to see a recessionary trend (-0.4% in November 2023), the outlook for 2024 is more favorable, with growth of 1.5% and even above 2.3% in subsequent years.

Luxembourg demonstrates a high level of transparency and strictly applies global compliance standards. As the second largest private fund manager, Luxembourg is one of the best money markets in the world.

The economy of the future in Luxembourg

Luxembourg's openness rate stands at 168.5%, making it the most open economy in the world. Luxembourg is the country that receives the most direct investment, with €2.39 trillion, behind the United States and the Netherlands.

Luxembourg is focusing its strategy on sustainable and competitive economic development, with an eye to the future and the technologies of tomorrow. Its development is clearly centered on digital technology and respect for the environment. The priority sectors are the development of information and communication technologies, health, logistics, smart industry 4.0, financial services, and space.

More information on banks and how to open a bank account in Luxembourg.

Quality of life for Luxembourg residents

Luxembourg is also described by its inhabitants as a place offering a high quality of life, with high standards.

Overall, the standard of living in Luxembourg is high. 280 Luxembourg families are classified as "UHNWI (ultra high net worth individuals)," with a fortune of more than $30 million. 7% of the population has assets of more than $1 million.

Luxembourg's GDP per capita is one of the highest in the world, at $90,900 per capita in 2023 according to the World Bank.

However, according to the latest figures, 19% of the population is affected by poverty in the country. The poverty threshold in the Grand Duchy is set at less than €2,177 per month. Find out more about minimum wages in Luxembourg.

Household finances and cost of living

Living in Luxembourg means opening a local bank account to manage your finances and receive your salary or other income, such as family allowances.

Nearly half of government spending is financed by direct taxes, such as income tax. Unlike in many countries, almost all personal income is subject to taxation.

Salaries in Luxembourg are higher than the European average, and particularly higher than in other parts of the Greater Region. However, it is important to put the real cost of living in the Grand Duchy of Luxembourg into perspective.

Housing prices are comparable to those in London and Paris. In some neighborhoods of Luxembourg City, prices per square meter reach €15,000 or more.

The cost of food and clothing is also higher than in neighboring countries.

Conversely, some products are cheaper, such as alcohol, tobacco, fuel and, until recently, vehicles. Value Added Tax is 17%. Find out more about shopping in Luxembourg.

Luxembourg, a country for millionaires?

According to the consulting firm Capgemini in its "World Wealth Report," Luxembourg has proportionally more millionaires than its two neighboring countries, France and Belgium.

In fact, around 7% of the population are millionaires. The majority of them have an estimated fortune of between $1 million and $5 million. 280 people have a fortune of over $30 million.

Find out more about Luxembourg to help you decide whether to move there.