# Luxembourg

 Country code: LU · Currency: EUR · Language: German

**Pros**
- Competitive corporate tax rates and extensive network of double taxation treaties for international business.
- Exceptional political stability and minimal corruption levels for a secure private capital environment.
- World-class digital infrastructure and strategic central location within the European single market.

**Cons**
- Extremely high real estate prices and cost of living burden on operational expenses and talent acquisition.
- Rigid labor laws and high mandatory social security contributions burden on the cost of employment.
- Pervasive state bureaucracy and complex regulatory requirements for specific financial and commercial activities.

Long story short: In Luxembourg, the state rolls out the tax red carpet for you, provided you're a holding company or a fund: the effective rates make any accountant's jaw drop.

Except that jackpot isn't for the average shopkeeper: setting up a regular business here costs you dearly in charges and lawyers, and the administration stays picky about paperwork.

Beyond that: an ultra solid banking system, spotless infrastructure, corruption that's basically nonexistent, safety that holds up fine in the nice neighborhoods, decent food, rolling green scenery, but housing prices that will make you wince.

## Will your income be taxed?

Long story short: YES, A LOT.
Income gets *fleeced* in **Luxembourg** (top marginal rate **42%**), but the residency test is surprisingly hands-off.

The bill is brutal for residents; the whole game is simply not to become one by accident.

**01.1 Income tax**

| Metric | Value | Detail |
| --- | --- | --- |
| Personal income tax | 0 → 42% | progressive · 23 brackets |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 15,328 | exempt |
| 15,328 – 17,883 | 8% |
| 17,883 – 20,437 | 9% |
| 20,437 – 22,992 | 10% |
| 22,992 – 25,547 | 11% |
| 25,547 – 28,101 | 12% |
| 28,101 – 30,760 | 14% |
| 30,760 – 33,419 | 16% |
| 33,419 – 36,078 | 18% |
| 36,078 – 38,737 | 20% |
| 38,737 – 41,396 | 22% |
| 41,396 – 44,055 | 24% |
| 44,055 – 46,714 | 26% |
| 46,714 – 49,373 | 28% |
| 49,373 – 52,032 | 30% |
| 52,032 – 54,691 | 32% |
| 54,691 – 57,350 | 34% |
| 57,350 – 60,009 | 36% |
| 60,009 – 62,667 | 38% |
| 62,667 – 136,075 | 39% |
| 136,075 – 204,095 | 40% |
| 204,095 – 272,115 | 41% |
| 272,115 + | 42% |

**01.2 Tax residence test**

_A single active rule is enough to make you tax-resident._

| Metric | Value | Detail |
| --- | --- | --- |
| 183-day rule | exists here |  |
| Economic interest | does not exist here |  |
| Family centre | does not exist here |  |
| Habitual abode | exists here |  |
| Extended-stay test | does not exist here |  |

## Will your wealth be taxed?

Long story short: NO.
Capital gains ride free in **Luxembourg**, and there's no annual wealth levy.

The catch waits at the funeral: *inheritance* has its own regime when the money passes down. Holding costs nothing; handing it over has a price tag.

**02.1 Investment income**

| Metric | Value | Detail |
| --- | --- | --- |
| Capital gains | 0% | flat · +45.8% Maximum progressive income tax rate applied if the asset is held for less than 6 months · +22.9% Maximum rate applied if the asset is held for more than 6 months but the individual holds a material interest (>10% of corporate capital) · +1.4% Dependency contribution applied on the taxable part of the gains for individuals subject to the Luxembourg social security system |
| Dividend tax | 42% | progressive · +7% Solidarity tax of 7% of taxes · +9% Solidarity tax of 9% for taxpayers earning more than EUR 150,000 in tax class 1 and 1a or more than EUR 300,000 in tax class 2 |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 15,328 | exempt |
| 15,328 – 17,883 | 8% |
| 17,883 – 20,437 | 9% |
| 20,437 – 22,992 | 10% |
| 22,992 – 25,547 | 11% |
| 25,547 – 28,101 | 12% |
| 28,101 – 30,760 | 14% |
| 30,760 – 33,419 | 16% |
| 33,419 – 36,078 | 18% |
| 36,078 – 38,737 | 20% |
| 38,737 – 41,396 | 22% |
| 41,396 – 44,055 | 24% |
| 44,055 – 46,714 | 26% |
| 46,714 – 49,373 | 28% |
| 49,373 – 52,032 | 30% |
| 52,032 – 54,691 | 32% |
| 54,691 – 57,350 | 34% |
| 57,350 – 60,009 | 36% |
| 60,009 – 62,667 | 38% |
| 62,667 – 136,075 | 39% |
| 136,075 – 204,095 | 40% |
| 204,095 – 272,115 | 41% |
| 272,115 + | 42% |

| Metric | Value | Detail |
| --- | --- | --- |
| Interest income | 20% | flat |

**02.2 Wealth & estate**

| Metric | Value | Detail |
| --- | --- | --- |
| Wealth tax | NONE | no annual wealth tax · no real-estate wealth tax · no net-worth assessment |
| Inheritance system | APPLIES | heir-based · 5 heir classes |

| Heir | Top rate | Allowance |
| --- | --- | --- |
| Spouse | EXEMPT | — |
| Children | 0% | — |
| Siblings | 6% | — |
| Other relatives | 9% | — |
| Non-relatives | 15% | — |

**02.3 Crypto**

| Metric | Value | Detail |
| --- | --- | --- |
| Crypto · tax regime | — | Rate: 45.8% · Crypto-assets are classified as intangible assets. Capital gains are tax-exempt if held for more than 6 months, provided the activity is not deemed professional. Speculative gains (held < 6 months) are exempt if the total annual profit is below 500 EUR; otherwise, they are taxed at progressive rates up to 42% plus a solidarity surcharge (7-9%). Crypto-to-crypto swaps are explicitly defined as taxable disposals. |
| Crypto-to-crypto | TAXABLE | each swap counts as a disposal — gains realised at every trade |
| FATF travel rule | SIGNED | committed but not yet enforced |

## Easy to run a company there?

Long story short: NO.
Corporate tax in **Luxembourg** is **16%**, but the rate isn't what hurts. *Misuse of corporate assets is a criminal offense*; the textbook case is the French *abus de biens sociaux*: spend your own company's money on yourself and you can end up prosecuted, even as sole shareholder, because the company is a separate legal person and your consent means nothing.

And the *registries are public*: your name as shareholder, free to browse.

For an owner-operator, those two together weigh far more than the rate, and unlike the rate they don't negotiate. Run it clean and you're fine; run it casually and you'll get burned.

**03.1 Rates**

| Metric | Value | Detail |
| --- | --- | --- |
| Corporate tax | 14 → 16% | progressive · +7% solidarity surtax on the CIT amount |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 202,751 | 14% |
| 202,752 – 231,716 | 30% |
| 231,717 + | 16% |

| Metric | Value | Detail |
| --- | --- | --- |
| VAT standard rate | 17% | 4 distinct tiers in force |

| VAT family | Category | Rate |
| --- | --- | --- |
| Food & drink | food | 3% |
| Food & drink | non-alcoholic | 3% |
| Food & drink | alcohol | 14% |
| Print media | books | 3% |
| Print media | ebooks | 3% |
| Health | pharma | 3% |
| Energy | electricity | 8% |
| Energy | natural gas | 8% |
| Clothing | kids clothing | 3% |
| Digital & telecom | broadcast | 3% |

**03.2 Regime & registry**

| Metric | Value | Detail |
| --- | --- | --- |
| IP Box · Patent Box | NONE | no IP regime · IP income taxed under standard corporate rules |
| Misuse of corporate assets | CRIMINAL | criminal liability · Article 1500-11 of the Law of 10 August 1915 on commercial companies · Luxembourg law strictly adheres to the principle of the autonomy of the legal entity. Under Article 1500-11 of the Law of 1915, a sole director-shareholder can be held criminally liable for 'abus de biens sociaux' (misuse of corporate assets) if they use company assets for personal purposes contrary to the corporate interest. The law considers the company's patrimony to be legally distinct from the shareholder's personal assets, and this separation must be respected even in single-member companies (SARL unipersonnelle) regardless of the company's solvency. |
| Shareholders privacy | PUBLIC | Registre de Commerce et des Sociétés (RCS) |
| Directors privacy | PUBLIC | Registre de Commerce et des Sociétés (RCS) |

**03.3 Incorporation cost**

_In this country, the most standard company form is called Société à responsabilité limitée (Private Limited Liability Company). The costs below are for incorporating a company in its simplest form, for reference only._

| Metric | Value | Detail |
| --- | --- | --- |
| Notary Fees (Statutory) | USD 1,390 |  |
| RCS Registration and Publication Fees | USD 232 |  |
| Professional Incorporation and Licensing Services | USD 2,896 |  |
| Total | USD 4,518 |  |

## A good fit for a holding?

Long story short: YES.
**Luxembourg** is built for holding, plain and simple. An *extensive treaty network* (**90** signed agreements) hacks down withholding on cross-border dividends, interest and royalties, and a *full participation exemption* (**100%** on qualifying dividends and gains) lets value flow through without a domestic tollbooth.

Top-shelf plumbing: a holding parked here travels the world without leaking.

**04.1 Substance & exemptions**

| Metric | Value | Detail |
| --- | --- | --- |
| Territorial · individuals | WORLDWIDE | worldwide income taxation regardless of source |
| Territorial · corporates | WORLDWIDE | worldwide corporate taxation |
| Participation exemption | 100% | 10% holding · 12 months min |
| CFC rules | APPLY | Luxembourg targets non-distributed income of controlled foreign entities arising from artificial arrangements established primarily to gain a tax advantage, provided specific control and effective tax rate thresholds are met. |

**04.2 Withholding tax · non-resident**

| Metric | Value | Detail |
| --- | --- | --- |
| WHT · dividends | 15% | non-resident outbound |
| WHT · interest | 0% | non-resident outbound |
| WHT · royalties | 0% | non-resident outbound |
| Tax-haven WHT | 15% | penalty rate · blacklisted destinations |

**04.3 Treaty network**

| Metric | Value | Detail |
| --- | --- | --- |
| Treaties signed | 84 | active |
| Treaties pending | 6 | in negotiation |

## Easy to come and go?

Long story short: SOME.
**Luxembourg** taxes your worldwide income while you're resident, but at least the exit is free: *no exit tax* on the way out.

Leaving costs you paperwork, not money; your unrealised gains walk out the door with you, untouched.

**05.1 Exit & dual nationality**

| Metric | Value | Detail |
| --- | --- | --- |
| Exit tax | NONE | no triggers active · residence change tax-free · no deemed-disposal mechanism |
| Dual citizenship | ALLOWED | naturalised citizens may keep their existing nationality |

**05.2 Citizenship paths**

| Metric | Value | Detail |
| --- | --- | --- |
| Residence | 5 years | available path to naturalisation |
| Marriage | — | available path to naturalisation |
| Birth | jus soli | available path to naturalisation |
| Descent | 1 gen | available path to naturalisation |
| Investment | — | not available |

## Is your money watched?

Long story short: YES, CLOSELY.
**Luxembourg** signed *every exchange framework that matters* and runs a *public corporate registry*. Whatever you do here (earn, hold, structure) is reported, searchable, or both.

Your money is watched from every angle; if discretion is part of your plan, this isn't your jurisdiction.

**Multilateral reporting frameworks — 5/9 active · 3 pending**

| Item | Status | Detail |
| --- | --- | --- |
| CRS | In force | 2017 |
| CARF | Signed | 2024 |
| FATCA | In force | 2014 |
| MLI | In force | 2019 |
| BEPS | Signed | — |
| MAAC | In force | 2014 |
| GLOBAL FORUM | Signed | — |
| EOIR | In force | — |
| CRYPTO TRAVEL RULE | None | — |

## Is it blacklisted?

Long story short: NO.
**Luxembourg** is *clean on every major blacklist* (FATF, EU, France, Spain, Portugal, Brazil) and sits *inside* the FATF club.

Wiring money to or from here raises zero eyebrows: no flags, no extra questions, no compliance officer waking up. Reputationally, a non-event.

**Blacklist exposure — Clear everywhere**

| Item | Status | Detail |
| --- | --- | --- |
| EMBARGO | Clear | un / us / eu sanctions |
| FATF | Clear | grey / black list |
| EU | Clear | non-cooperative list |
| FRANCE | Clear | ETNC list |
| SPAIN | Clear | tax-haven list |
| PORTUGAL | Clear | favourable regimes |
| BRAZIL | Clear | low-tax list |

## Do you feel free there?

Long story short: PARTLY.
**Luxembourg** is an EU member, which puts it on the *digital euro* conveyor belt: a programmable, traceable CBDC built to run on the same rails as the currency itself.

Under *MiCA*, crypto is regulated rather than banned, but the direction of travel for money in the bloc is *state-controlled rails* by default.

Press freedom may sit high (RSF rank **\#13**); financial freedom is caught in a ratchet, and ratchets only turn one way.

**08.1 Press freedom**

| Metric | Value | Detail |
| --- | --- | --- |
| Press freedom · RSF index | 13/180 | score 83 · ↓ 2 ranks year-on-year |

Central bank digital currency

    Program Status Cross-border Sources     Project Venus

The Banque de France and the Banque centrale du Luxembourg are proposing one possible cross-border answer to the growing interest from the market to perform digital native securities settlements with CBDC.

Banque centrale du Luxembourg

   PILOT   —   [announce →](https://www.banque-france.fr/en/press-release/banque-de-france-and-banque-centrale-du-luxembourg-publish-results-project-venus "Announcement")    Digital Euro

A digital euro could support the Eurosystem's objectives by providing citizens with access to a safe form of money in the fast-changing digital world.

European Central Bank

   RESEARCH   —   [announce →](https://www.ecb.europa.eu/press/intro/news/html/ecb.mipnews250409.en.html "Announcement")    Wholesale Digital Euro

Main motivations are to (i) consolidate and further develop the ongoing work of Eurosystem central banks in this area, and (ii) gain insight into how different solutions could facilitate interaction between TARGET real-time gross settlement (RTGS) services and DLT platforms.

European Central Bank

   PILOT   —   —    Stella

It explores the opportunity for using DLT to improve financial market infrastructure to support payment and securities settlement.

European Central Bank

   RESEARCH   —   [announce →](https://www.boj.or.jp/en/announcements/release_2020/data/rel201009e1.pdf%0D%0Ahttps://www.boj.or.jp/en/announcements/release_2020/data/rel200212a1.pdf%0D%0Ahttps://www.tbstat.com/wp/uploads/2020/08/KPMG-CBDC-Report.FINAL_.v.1.02.pdf "Announcement")

 programs 4

## Connected to the world?

Long story short: EXCELLENT.
**Luxembourg** is wired straight into the global money grid: **10/11** of the services we track work here.

*Stripe* onboards you, so you can charge cards from a laptop the day you land. Wise, Revolut, PayPal: pick your rails, they all run. One footnote for your comfort, not your business: *Amazon* doesn't deliver here, so plan on local e-commerce for the doorstep part of life.

**Accept payments — 6/6 available**

| Item | Status | Detail |
| --- | --- | --- |
| Stripe | Available | card payments |
| PayPal | Available | wallet payments |
| Adyen | Available | enterprise psp |
| Mollie | Available | eu payments |
| GoCardless | Available | direct debit |
| Paddle | Available | merchant of record |

**Bank and move money — 3/3 available**

| Item | Status | Detail |
| --- | --- | --- |
| Wise | Available | multi-currency |
| Revolut | Available | personal banking |
| Revolut Business | Available | business banking |

**Buy and sell on Amazon — 1/2 available**

| Item | Status | Detail |
| --- | --- | --- |
| Amazon | Not available | consumer delivery |
| Amazon Seller | Available | marketplace selling |

  SEE ALSO## Other jurisdictions worth comparing

Picked by similarity of strategic profile to Luxembourg. No editorial ranking — neighbours in the same scoring space.

  PROFILE-ADJACENT Same shape, comparable overall friction.

 [   Croatia HR  → ](https://stateless.sx/en/country/hr) [   Slovakia SK  → ](https://stateless.sx/en/country/sk) [   Latvia LV  → ](https://stateless.sx/en/country/lv)

  NOTABLY MORE FAVORABLE Same family of strategies, higher total score.

 [   United Arab Emirates AE  → ](https://stateless.sx/en/country/ae)

  NOTABLY LESS FAVORABLE Same family of strategies, lower total score.

 [   Slovakia SK  → ](https://stateless.sx/en/country/sk) [   Greece GR  → ](https://stateless.sx/en/country/gr) [   Sweden SE  → ](https://stateless.sx/en/country/se)