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Country Reports

Luxembourg Country Report

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Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

Luxembourg is governed by a largely stable coalition of the liberal Democratic Party (Democratesch Partei: DP), the centre-left Luxembourg Socialist Workers’ Party (Lëtzebuerger Sozialistesch Aarbechterpartei: LSAP), and the Greens (Déi Gréng: DG) under the leadership of Prime Minister Xavier Bettel. The government broadly follows a socially liberal and investor-friendly agenda.The government aims to ensure a continuation of the overall favourable investment environment for both domestic and international businesses while trying to benefit from relocation of businesses in the context of Brexit.As a small, open country – export and import volumes are each almost twice the size of real GDP – Luxembourg’s economy is being hit hard in 2020 by the ramifications of the coronavirus disease 2019 (COVID-19) virus pandemic. However, the greater relative role of services rather than goods, compared with many of its European peers, means that its economic rebound could have greater momentum once virus-related restrictions on border crossings and public gatherings have been largely lifted.Domestically, the divergence already observed during 2018–19 between healthy private and especially public consumption growth and underperforming fixed investment will be exacerbated by the uncertainty caused by the impact of the COVID-19 virus pandemic. Consumer spending, although hurt substantially by the lockdown measures in place during March–May 2020, will recover more quickly thanks to the boost to purchasing power linked to pre-pandemic increases in nominal wages (helped by wage indexation) and the plunge in oil prices during the first quarter. The persistent risk of a “no-deal” Brexit remains more of a problem for investors than consumers.The risk of both low-capability and more sophisticated Islamist militant attacks carried out by lone actors or small cells inspired but not necessarily directed by non-state armed groups such as the Islamic State is likely to remain significantly lower than in other Western European countries such as Belgium, France, Germany, or the United Kingdom.
Last update: June 17, 2020

Operational Outlook

Luxembourg is usually a favourable business and investment destination but there is currently a heightened risk of disruption caused by the coronavirus disease 2019 (COVID-19) virus outbreak and related emergency measures. Luxembourg's infrastructure, administrative set-up, and industrial relations are of a very high standard. The population is highly educated and often well-versed in English, French, and German. Industrial action risks are likely to remain comparatively low. High labour costs can present an obstacle to foreign direct investment (FDI), but Luxembourg remains a top investment conduit. The country's geographic position, between France, Belgium, and Germany, helps it to attract substantial EU-related investments.

Last update: June 24, 2020

Terrorism

Moderate

The risk of both low-capability and more sophisticated Islamist militant attacks carried out by lone actors or small cells inspired but not necessarily directed by non-state armed groups such as the Islamic State is likely to remain significantly lower than in other Western European countries such as Belgium, France, Germany, or the UK. However, the presence of many international institutions, multinational companies, and banks in the capital makes Luxembourg a potential high-profile target. Luxembourg's support of the international US-led coalition against the Islamic State slightly increases the risk of retaliatory attacks.

Last update: June 24, 2020

Crime

There are no major security risks affecting businesses operating in Luxembourg. The country has effective law enforcement and police services. The main problem visitors may encounter is petty crime, especially pickpockets on buses and around the central station in Luxembourg City. Incidents of violent crime and drug trafficking have increased over recent years, but this is unlikely to affect businesses based in Luxembourg. Overall statistics indicate decreasing crime in the country, while cybercrime has become an increased focus of authorities.

Last update: June 24, 2020

War Risks

Inter-state war risks in Luxembourg will remain negligible, mainly due to the country's size and its geographic location at the centre of Europe. Luxembourg maintains very friendly diplomatic relations with its neighbouring countries and relies on deep integration in multilateral agreements and treaties to ensure its national security. The country is a founding member of NATO and the EU, among other international institutions, and hosts the European Court of Justice.

Last update: June 24, 2020

Social Stability

Low

Luxembourg is an internally stable country and disruptive civil unrest is unlikely overall. However, there is a moderate risk of protests in the capital due to the presence of a broad array of international organisations as well as multinational businesses in the country. Rallies are likely to remain largely peaceful and are unlikely to significantly hamper business activities. The probability of all forms of larger demonstrations has further declined with the restrictions in place to contain the spread of the COVID-19 virus, but protest activity has picked up again since June 2020.

Last update: June 24, 2020

Health Risk

Low

Vaccinations required to enter the country

No vaccinations are required to enter the country.

Routine Vaccinations

Hepatitis A: A vaccine is available for anyone over one year of age. The vaccine may not be effective for certain people, e.g. those born before 1945 and who lived as a child in a developing country and/or have a past history of jaundice (icterus). These people can instead get a shot of immune globulin (IG) to boost their immunity against the disease.

Hepatitis B: A vaccine is available for children at least two months old.

Diphtheria-Tetanus-Polio: A booster shot should be administered if necessary (once every ten years).

Other Vaccinations

Typhoid Fever: If your travels take you to regions with poor sanitary conditions (for children two years old and up).

Tick-Borne Encephalitis: For stays in rural zones and for hiking enthusiasts (for children over the age of one).

For Children: All standard childhood immunizations should be up-to-date. In the case of a long stay, the BCG vaccine is recommended for children over one month and the MMR (measles-mumps-rubella) vaccine for children over nine months.

Last update: April 5, 2019

Practical Information

Climate

Luxembourg has a tempered continental climate with relatively steady levels of rainfall throughout most the year with heavier showers in winter. The fall is often cloudy and rainy. Summer days are sunny and nights are cool. Winters are harsh with frequent snow storms. Springs are dry and cool.

Useful Numbers

Country Code: +352
Police: 113
Fire Dept., Ambulance: 112

Electricity

Voltage: 220 V ~ 50 Hz

Outlets:

Last update: April 5, 2019