Luxembourg a country for expats?
Dear Marina! Would you recommend Luxembourg as a country for expats? Is this country not to small and why would people move from larger cities to the Grand-Duchy?
Marina Kirchens-Sargsian, CEO and founder of MSK Group Luxembourg
There are many reasons why Luxembourg is a great choice not only for investments. It is a great location to launch, to implement and to test business ideas in a multicultural environment located in the economic heartbeat of Europe. It is easy to list numerous facts and/or statistics to prove this assumption.
Which facts in particular?
Let me start with this. Luxembourg is for example one of only 10 nations worldwide to have been assigned the highest possible AAA-rating of the major credit rating agencies Standard & Poor’s (S&P), Fitch Ratings and Moody’s. Hence, bonds issued by the Grand Duchy of Luxembourg have a high degree of creditworthiness and inherently the lowest risk of default. Recently Luxembourg successfully issued a €2,5 billion bond with negative interest rate. The AAA-rating is a clear indicator for a continued cultural attitude of responsible and forward planning fiscal policies of the country. The AAA-rating is essential for attracting and maintaining investors from all over the world to/in the Luxembourg financial center, which offers high class expertise in many different areas such as wealth management.
A triple A-rating is a great deal for the economy but can this be considered as an incentive for foreigners to move to Luxembourg ?
You have to see this in a broader sense. Since the end of World War II in 1945 Luxembourg has seen as few as 11 different Prime Minister, three of which became the President of the European Commission. According to the INSEAD & OMPI Global innovation index Luxembourg ranks 2nd in terms of political stability and safety. The responsible and forward looking fiscal and economic policies accrued from this political stability lead to the fact that employment increased by 50% in the last 20 years compared to the EU average of 20% (Eurostat) and that at the same time the productivity of the working people only increased! Today Luxembourg yearly ranks among the top three economies in the world with the highest per capita productivity of above $115.000 (compared to $62.000 in the US)! Furthermore, even though Luxembourg is a member in numerous supranational institutions as well as NATO, it can be considered as a political neutral actor who is trying to cultivate good and respectful relationships with all the actors on the international political scene. Ministers are regularly visiting their counterparts outside the EU in the US, Russia and China. One more decisive fact, which contributes to the political stability of the country is its head of state Henri, Grand Duke of Luxembourg. During his 20 years reign Henri was a useful door opener in the world for Luxembourgish businesses. All this results in a triple A-rating as a recognition by international actors of Luxembourg as one of the greatest economies and hence one of the best countries for expats.
That’s true, a triple A-rating from different rating agencies is a great recognition of the country’s business minded governments. Is there something more to add?
There are many things to add. But since we are in the middle of an international crisis, let me mention a few measures taken by the Luxembourgish government to tackle the crisis. Even though that Luxembourg has been impacted severally by the sanitarian Covid-19 crisis its dynamic and international economy recovers quicker than most countries of the European Union. During the crisis, the government could implement quick measures to absorb the shock of the lockdown declared on March 2020. Here a selection of a few of these measures : To protect salaried workers and their jobs, the government extended the scope of the short-time working allowance and simplified the administrative procedures for companies safeguarding jobs. During the lockdown and far beyond even after 31st of December 2020 employees in short-time work continue to receive 80% of their salary and no less than the minimum wage for unqualified workers of €2.141,99. At the same time, the government agreed with major banks through granting public securities to freeze if necessary mortgages and loans to further absorb the shocks of the crisis for those who are especially impacted by it. Furthermore, any increase of the rentals during the crisis have been suspended. Luxembourg is a safe place! In many turns! And Luxembourg is the only country in the European Union, which did not see its employment market shrink due to the Covid-19 crisis! To the contrary, it increased by 0,6 percentage points!
So to resume he economy is strong and resilient, the political environment is stable and the country is taking care of its citizens. Those are indeed great incentives.
Yes, to put it simple and short: Luxembourg is one of the safest countries in the world. Political and human rights are in no case at risk. The country is neighboring France, Belgium and Germany – all founding states of the European Union. Luxembourg is a democracy surrounded by big European democracies.
Luxembourg in the evening!
There are still many more factors or incentives missing like high wages or great social security with all-in coverage for everyone. To be clear: Luxembourg is safe, protective and it offers great business opportunities. Even though the population is small, Luxembourg is facing one of the largest population increases in the western world. Many businesses are still missing in Luxembourg and people immigrating to Luxembourg have great chances to make innovative ideas work. And keep in mind if it works in Luxembourg it works everywhere, because Luxembourg is a multicultural country and home to people from more than 170 different nations.
During the crisis the country proved one more time its resilience and dynamism. Luxembourg is a country for the people, their families and their businesses!
Book an appointment with one of our experts to discuss your immigration matter to Luxembourg!