Luxembourg’s economy is portrayed by its fiscal system and a high level of worldwide receptiveness. The financial sector is the principle main impetus behind the Grand Duchy’s economy, speaking to around 33% of the nation’s GDP, making the nation defenseless against outside stuns.
The nation’s growth was evaluated at 2.6% in 2019, principally determined by private consumption and investments. The IMF figures a development of 2.8% this year and 2.7% in 2021, because of improved work economic situations in a debilitating outer exchange setting.
Luxembourg is the third-wealthiest nation on the planet as far as GDP per capita (the first in the EU – PPP) and has one of the most elevated current record surpluses as a portion of GDP in the euro zone. It keeps up a solid budgetary situation, with an expected 2019 excess of 0.9% of GDP, which should increment somewhat in 2020 and 2021 (1% and 1.2% separately).
The public debt level is among the lowest in the region (21.3% in 2019 and 21.1% this year and the following, as indicated by IMF) and is set to continue declining in the up and coming years. Inflation rate was evaluated around 1.7% in 2019, down from 2% in 2018 notwithstanding an ascent in compensation, on account of lower energy costs.
Main sectors of industry
Agriculture is nearly non-existent, as the nation’s arable land is restricted to 61,860 hectares. It contributes just 0.2% to the GDP and utilizes around 1.4% of the dynamic populace (World Bank, 2019). The nation’s principle crops are wine, wood, grains and potatoes.
The industrial sector has verifiably been ruled by the creation of iron and steel. Various industrial sites of the mining area in Southern Luxembourg gave its turn of events and its riches to the nation.
Over the last years, this sector has been expanded with the expansion of compound processing plants, plastic items and light building. These days, the assembling segment speaks to just 5% of GDP.
Taxes for businesses
Luxembourg charges corporate residents on the global income and non-residents just on Luxembourg-source pay.
Companies with assessable pay lower than EUR 175,000 are liable to CIT at a pace of 15%. Organizations with assessable pay between EUR 175,000 and EUR 200,001 are liable to CIT figured as follows: EUR 26,250 or more 31% of the expense base above EUR 175,000 (for monetary years [FY] 2019 and 2020).
The CIT rate is 17% for organizations with taxable income in abundance of EUR 200,001 prompting a general duty pace of 24.94% in Luxembourg City for FY 2019 and FY 2020 (considering the solidarity surtax of 7% on the CIT rate, and including the 6.75% civil business charge rate material).
The CIT does not apply to tax-transparent entities.
A 7% solidarity surtax is imposed on the CIT sum.
City business charge is collected by the cooperatives and differs from region to region and for Luxembourg City is 6.75%.
The joined CIT rate (for example CIT, solidarity surtax, and city business charge) for Luxembourg City is 24.94% for FY 2019 and FY 2020.
Investing in Luxembourg
Reasons to invest in Luxembourg:
- A gate to Europe
- 3rd most globalised economy in the world
- 1st Highest labour productivity in the world
- Easy business creation process
- 2nd in the world in terms of global logistics capabilities
- 6th largest airfreight platform in Europe
- 2nd most inclusive economy in the world
- World’s highest GDP performance
- 11th most competitive economy in the world