Nearly half of the population are foreign nationals, and over 200,000 additional cross-border workers commute in daily, creating a uniquely transnational labor market. Meanwhile, Luxembourg lands in the top ten of the Economist’s Democracy Index and the top five EU nations on Transparency International’s Corruption Perceptions Index, reflecting high political stability and minimal red tape, thus creating a low-risk, innovation-friendly environment for founders.

An international engine

As a founding member of the EU, NATO and the eurozone, Luxembourg plays a central role in European governance and is home to several European institutions, such as the European Court of Justice, the European Investment Bank and the Secretariat of the European Parliament. It is also home to more than 1,500 international companies, including Amazon EU, PayPal, Ferrero, ArcelorMittal and SES. Many chose Luxembourg as a base for expansion due to its favorable regulatory environment, which combines streamlined company formation with tailored support for innovation through public-private agencies like Luxinnovation. 

It also offers a multilingual workforce. English is widely used in business, especially in startups and financial services, and French, German and Luxembourgish are also official languages. Nearly 70% of Luxembourg’s workforce comprises foreign residents or cross-border commuters from France, Belgium and Germany, positioning the country as a central meeting point in the European market. Six out of ten workers hold a university degree – one of the highest rates in Europe. Thanks to high education levels and an emphasis on digital skills and life sciences, the country also ranks third in the 2024 IMD World Talent Ranking.

Startup Luxembourg and a state-supported ecosystem

The national initiative Startup Luxembourg (startupluxembourg.com), supported by the Ministry of the Economy, acts as an entry and an amplifier for the country’s startup ecosystem. It offers resources for international founders looking to enter the market, including a searchable startup database, global promotion and partnerships with key innovation actors. Public-private institutions such as Luxinnovation (luxinnovation.lu) and the Luxembourg Chamber of Commerce offer additional support for R&D, business development and market expansion. “Our goal,” says Lex Delles, Minister of the Economy, SME, Energy and Tourism, “is to encourage the creation of new innovative startups, support the growth of scaleups, and attract international entrepreneurs and investors to Luxembourg.” 

The country is home to over 700 startups and scaleups across sectors such as fintech, healthtech, cleantech, space, manufacturing and data infrastructure. Luxembourg has invested strategically in building hubs and clusters, including the House of Startups (host.lu), which unites incubators such as the Luxembourg-City Incubator, LHoFT (Luxembourg House of Financial Technology). The national tech incubator Technoport also plays a central role in supporting early-stage ventures with prototyping labs, coaching and network access. “Startups and entrepreneurs are at the heart of Luxembourg’s innovation ecosystem, shaping the country’s future,” says Carlo Thelen, CEO of the Luxembourg Chamber of Commerce. “Their ambition drives progress, creates high-quality jobs and transforms bold ideas into market-ready solutions.” 

Startups benefit from simplified legal structures such as the SARL-S (the simplified limited liability company), efficient R&D and access to IP incentives, as well as from high data protection standards aligned with GDPR. The country’s stable legal system, political neutrality and transparent governance further enhance its appeal to international founders. 

A data-driven testbed for innovation

Luxembourg positions itself as a launchpad for data-driven ventures. Thanks to robust data protection laws and advanced IT infrastructure, the country has attracted companies working at the intersection of AI, cybersecurity and finance. The Ministry of the Economy also supports projects in quantum computing and high-performance computing through national and EU programs.

Space technologies also represent a major frontier. The Luxembourg Space Agency runs the national Space Resources initiative, encouraging commercial exploration of space resources. With strong legal and R&D frameworks, Luxembourg is one of the few countries with a dedicated strategy for space startups.

In 2024, the European Innovation Scoreboard named Luxembourg #1 in the EU for its attractive research system for the third consecutive year. The country’s commitment to innovation extends into clean energy, smart mobility and industrial digitization, reinforced by public-private partnerships and EU funding programs.

Living and working in Luxembourg

Luxembourg regularly ranks among Europe’s top countries for safety, quality of life and economic stability. According to the OECD,  Luxembourg has one of the highest per capita GDPs in the world, reflecting strong purchasing power and public investment, and it spends over 20% of its GDP on social protection, placing it among the highest in Europe. The country also provides extensive social services and modern infrastructure: universal healthcare, free public education (including multilingual early childhood programs) and unemployment and parental leave schemes.

In March 2020, it became the first country in the world to make all public transport (buses, trains and trams) free for both residents and visitors. This initiative, financed by public funds, supports climate goals by reducing car dependency and traffic congestion while promoting social inclusion and equal access to mobility. The measure is part of a broader sustainable mobility strategy outlined in the Modu 2.0 plan, which aims to increase public transport use by 25% by 2035 and invest heavily in multimodal infrastructure, including expanded rail lines and bike lanes.

Luxembourg offers a soft landing for international entrepreneurs: fast business registration processes, multilingual public services and accelerator programs targeted at foreign founders. Programs like Fit 4 Start (fit4start.lu), operated by Luxinnovation, offer up to €150,000 (~$167,000) in equity-free funding for innovative early-stage companies.

The government’s strong coordination across ministries, research institutions and incubators helps translate policy into execution, offering founders feedback loops and access to a continent-wide customer base.