Exceptional quality of life
Luxembourg is renowned for its high quality of life, as evidenced by various surveys and rankings. The Organisation for Economic Co-operation and Development (OECD) ranks Luxembourg ninth in its Better Life Index, which includes crucial factors such as safety, health, environment, and work-life balance.
Safety is a crucial aspect of life in Luxembourg. According to the same OECD study, about 87% of Luxembourgers feel safe, a rate higher than the average among the 41 countries surveyed. Additionally, Luxembourg has one of the lowest homicide rates.
Healthcare in Luxembourg is generally excellent, with accessible and efficient medical services. While private health insurance is an option, the local health insurance system covers a significant portion of medical expenses (doctor visits, physiotherapy, dental care, etc.). According to the OECD, 72% of Luxembourgers report being in good health, again higher than the average in the surveyed countries.
Luxembourg also boasts a well-preserved environment, with significant forest areas despite its small size.
Maintaining a work-life balance is another aspect of the high quality of life in Luxembourg. Only about 3% of employees in Luxembourg report working very long hours, compared to an OECD average of 10%.
Attractive job market and wages
Luxembourg is a prime example of where quality of life and job opportunities converge. According to the Employment Development Agency (ADEM), Luxembourg's job market is dynamic, with a lower unemployment rate than the European average, a multicultural environment, and a booming tertiary sector.
Luxembourg is not just a banking and financial hub; it has made significant efforts to diversify into media, information and communication technologies, logistics, health technologies, and eco-technologies. This diversification has been accompanied by a thriving startup ecosystem.
Significant investments have also been made in research and development, with internationally renowned research institutes such as the Luxembourg Institute of Science and Technology (LIST).
Moreover, the industrial sector still represents 10% of national employment, including steel, metal processing, chemical, materials, plastics, and electrical and electronic industries.
As one of the founding countries of the European Union, Luxembourg hosts several EU institutions, including the Secretariat of the European Parliament, the European Court of Justice, and some Directorates-General of the European Commission.
Salaries in Luxembourg are among the highest in the OECD, with an average annual salary of 58,413 euros. The minimum wage for unskilled labor is 2,256 euros per month. While the cost of living is high, Luxembourg has a wage indexation system that helps maintain purchasing power.
For EU nationals, accessing Luxembourg's job market is straightforward. For third-country nationals, a residence permit is required. Recent directives have made it easier for highly skilled workers to enter and stay in Luxembourg. European Blue Card holders, for example, can now remain in Luxembourg during the renewal process. Additionally, the minimum duration for an initial job contract has been reduced from one year to six months.
You can handle the application process yourself or with help from your future employer. All necessary information and documents are available on the official immigration website and in our Luxembourg expat guide. Note that a medical examination is required as part of the residence permit process.
Luxembourg's attractive tax system
Luxembourg's tax system is another strong incentive for expatriates.
Firstly, individuals do not pay wealth tax on properties or other assets in Luxembourg, which encourages investments. While income from assets (including interest, dividends, and capital gains) is taxed, the rates are often more favorable than in most EU countries. Dividends and capital gains, for example, are subject to income tax but with a 50% exemption for the former and only for securities held for less than six months for the latter. Gains on securities held for more than six months are exempt.
Income tax in Luxembourg starts at a relatively low rate of 8% and applies only to income above 11,265 euros. There are also tax deductions for certain credits, savings products, and insurance policies.
Corporate tax conditions in Luxembourg are also favorable, with one of the lowest corporate tax rates in the EU, according to OECD statistics. The average effective corporate tax rate in Luxembourg is 23.2%, compared to 25.9% in France and 26.6% in Germany. Detailed tax information is available on the government website.
Highly skilled foreign workers ("impatriates") can benefit from various tax advantages. You can also be eligible for tax exemptions for expenses related to your relocation, such as moving costs, school fees, and housing.
To qualify, you need at least five years of professional experience in the specific sector for which your employer is hiring you or seeks to develop in Luxembourg. This tax regime is applicable for up to eight years. All conditions are detailed on the government website.
