Why Incorporate in Luxembourg?
What are the factors contributing to the success of the financial service and banking sector?
The success of Luxembourg can be lent to a combination of factors. The country has built a reserve of expertise and its diminutive size gives it an outward-looking mentality, which is complimented by the multilingual, multicultural workforce. It operates against the backdrop of a stable political and social environment, supported by firm but sensitively-applied regulation. Laws are drawn up in consultation with the industry, with all parties eager to offer solid investor protection and robust action against money laundering. Financial firms are therefore able to benefit from a range of flexible and sophisticated investment vehicles.
Luxembourg is a popular centre for corporate finance
Luxembourg is also a popular centre for corporate finance, with many multinational groups establishing their head offices in the country. The stock exchange also has an integral role, specialising in the listing of bonds, with more than 3,500 issuers from over 100 countries represented.
In their quest for effective leadership and management, many global companies have established their corporate or regional headquarters in Luxembourg, in industries such as steel, sattelites, and cargo airlines among many other.
All of these successful companies have all decided to register a company in Luxembourg.
What are the advantages of Company formation in Luxembourg?
A rewarding tax environment and a business friendly legal and regulatory framework have made Luxembourg a leading jurisdiction for corporate holdings, known for the comprehensive participation exemption regulatory structure.
The high standard of living provides an excellent foundation for top executives and their families and helps attract international staff.
Through varied air and high-speed train connections, management and sales staff can rapidly access the European economic centers of activity.
The highly skilled, multi-lingual workforce assures a valuable resource for corporate functions, including finance and accounting, sales and marketing, supply chain management and logistics, and for research and development and IP management.
Individuals benefit from an 80% tax exemption on income generated from the acquisition and development of intellectual property (IP), leading to an effective tax rate of just over 5%
You benefit from other exemptions from capital gains and wealth taxes.
R&D (research and development) expenditure can be deducted if no commercial results are forthcoming.
Innovation is backed by the Public Research Centers and the University, as well as government-backed business-incubators and R&D investment incentives.
Another advantage of Luxembourg is the simple and easy importation process in the country. Importing goods into the EU often triggers import declaration, pre-financing of value added tax (VAT) and other such duties in the European country of importation. Thanks to an easy access to Government and custom authorities, these procedures can be made straightforward in Luxembourg. While most European countries ask for immediate payment of the import VAT, in Luxembourg such payment is shifted to the VAT return automatically. Therefore no cost is generated by the pre-financing of import VAT in Luxembourg, which can be helpful, particularly in start-up companies. Becasue of this, a great deal of international companies are shipping their products through Luxembourg to allow them to access the vital European market.