About Luxembourg

The Grand Duchy of Luxembourg is situated at the crossroads of Germany, France and Belgium. It is a small country with a population of approx. 400,000 residents, 30 percent of which are foreign Nationals. Luxemburgish, German, French, English and Portuguese are widely spoken.

Despite its small area, the country has a great selection of natural and cultural delights on offer.

Luxembourg is a founding member of the European Union and is part of the Eurozone. The country has had very stable governments over the last decade together with a peaceful social climate. The government is easily accessible and can react rapidly to international economic or political changes. The laws are voted by the parliament which is elected every five years and the government is committed to the European Union. The European Court of Justice and other European institutions are located here and the other European institutions located in Brussels are only one and a half hours from Luxembourg.

More than 150 Banks are established In Luxembourg and the country has more than 10,000 investment funds and holding companies. These Banks are internationally orientated and have the experience of providing services in an international and European environment. Large multinational companies like Goodyear and Du Pont de Nemours have been established in Luxembourg for a long time. Moving from industry to services, Luxembourg has recently welcomed the establishment of AOL and Amazon that built their European service headquarters here.

As of 31st of december 2005 the overall corporate tax rate stands at 30.38 percent and the standard VAT rate stands at 15 percent making it the lowest in the European Union. The wealth tax based on the net asset of the company stands at 0.5 percent but the government has announced the cancellation of this tax in 2006, at the latest. The trading or investment companies ("Soparfi") benefit from the EU parent/subsidiary directives on inter-company dividends, interest and royalties eliminating any withholding tax on intercompany flows of this type of income within the EU. Under certain conditions Luxembourg capital gains tax on the sale of shares held by these companies is not taxable. Luxembourg has entered into double taxation agreements with more than 45 countries, including USA, Israel and many countries in Latin America and Europe.