“Luxembourg offers a globally respected stable political and economic environment”

Xavier Bettel, Luxembourg’s Vice-Prime Minister and Minister for Foreign Affairs and Foreign Trade, spoke to Pontos de Vista Magazine about the country’s attractiveness as a location for foreign investment on a wide range of fronts. Find out what the future plans are for Luxembourg to continue to maintain its position as a strategic platform at the heart of Europe.


As Minister of Foreign Affairs and Foreign Trade of Luxembourg, would you like to begin by highlighting the honorable mission that it has been perpetuating to this day?
The promotion of Luxembourg has always been very close to my heart, also in my previous political functions. From my tenure as mayor of Luxembourg City to my current role as Minister of Foreign Affairs and Foreign Trade, I feel a duty to share this enthusiasm with the world. Luxembourg’s journey of success has been marked by its openness to innovation, from historical achievements in industries like steel to modern advancements in space technology. Embracing progressive policies and fostering an innovation culture have been crucial to our economic growth and will continue to shape our future trajectory.

What is certain is that Luxembourg has stood out as an investment destination, thanks to its robust economy and excellent logistics infrastructure. How do you describe the business environment in the country and how does it support foreign companies looking to expand their operations in Europe?
Luxembourg’s attractiveness to investors is the result of pro-business policies, with decision-makers adopting a holistic approach with transparent administrative procedures and dedicated to supporting innovation, characterized by a dynamic start-up community. Over 500 start-ups benefit from incubators, accelerator programs and other supportive initiatives, fostering a collaborative entrepreneurial ecosystem.
Luxembourg aspires to become a leading data economy, underpinned by state-of-the-art connectivity infrastructure, robust data processing capacity, and advanced cybersecurity measures. In addition to Luxembourg’s renowned global financial and banking center, it has successfully diversified into key and innovative sectors, including among others digital technologies, health-tech, green-tech, space exploration and research or logistics.
Luxembourg also offers extensive support for business expansions, notably through numerous trade representations abroad, the Chamber of Commerce, and the Enterprise Europe Network. With a conducive environment for testing and certification and interesting incentives for R&D activities, Luxembourg serves as an ideal EU market testbed, appealing for product localization due to its manageable size and diverse population.

One of the pillars of Luxembourg economic success is its political stability and, again, its vigorous financial system. How are these characteristics interesting for the country’s attractiveness as a location for foreign investment?
Luxembourg offers a globally respected stable political and economic environment, boasting an AAA credit rating and recognized as one of the world’s most competitive economies. Its well-established and tightly regulated financial sector contributes significantly to investor confidence.
Furthermore, Luxembourg prioritizes openness, international cooperation, and diplomacy. This commitment not only enhances Luxembourg’s influence but also creates opportunities for businesses to thrive in a connected global market.

A highly qualified workforce is also a key factor in the economic success of a country. So, to what extent does Luxembourg invest in developing and attracting international talent, and how does this investment benefit companies that choose to operate in the country?
Luxembourg has the most international population in the EU. With a multilingual, multicultural, and highly skilled workforce, the country offers a globally connected environment conducive to international business operations. According to INSEAD’s Global Talent Competitiveness Index 2023, Luxembourg is ranked number one globally in attracting talent, highlighting its attractiveness to professionals from various backgrounds.
Over the past two decades, Luxembourg has heavily invested in talent development, particularly through research-oriented universities with an international focus. This commitment to nurturing talent not only aids in attracting skilled individuals but also contributes to talent retention.
Initiatives include establishment of new public international schools, and streamlined immigration procedures, including the ability for spouses to work without additional permits. This focus on talent ensures that companies operating in Luxembourg can access a highly qualified, multilingual workforce in an environment that prioritizes work-life balance, as evidenced by the European Life-Work Balance Index 2023.

Furthermore, how is Luxembourg taking advantage of its central geographic location in Europe to facilitate cross-border trade and investment?
Luxembourg strategically utilizes its central European location to facilitate cross-border trade and investment. Positioned at the heart of the EU market, Luxembourg offers exceptional access to global markets, serving as a neutral business hub between neighboring countries, not least Germany and France. Luxembourg provides various advantages, including a multimodal logistics center with quality infrastructure and extensive connectivity. Its robust transportation network enables efficient distribution of goods across borders. Moreover, Luxembourg serves as an international banking center, facilitating cross-border transactions and benefiting from customs cooperation and trade agreements within the EU.
Engagement in regional collaboration initiatives, such as those within the Greater Region, further integrates Luxembourg’s economy and fosters a conducive business environment. Cluster initiatives promote innovation and collaboration, making Luxembourg an attractive location for multinational headquarters seeking coordinated operations across multiple countries.

Considering the growing importance of sustainability in global business, how does the country position itself as a sustainable and responsible investment destination?
Luxembourg is deeply committed to sustainable development, aligning its economic priorities with global sustainability needs. With a focus on the digital and green transition, the country is actively promoting resource efficiency, waste reduction, and sustainable consumption. This emphasis on sustainability extends to attracting investments in sectors that align with circular economy principles, fostering innovation and growth in green industries.
Moreover, Luxembourg is a leading financial center for green, social, and sustainable finance. Initiatives like the Luxembourg Green Exchange (LGX), the world’s first platform dedicated exclusively to sustainable financial instruments, highlight the country’s dedication to promoting responsible investment practices. Additionally, Luxembourg is actively encouraging the incorporation of environmental, social, and governance (ESG) criteria in investment decisions, further solidifying its reputation as a sustainable and responsible investment destination.

In the future, what are Luxembourg prospects and plans to continue attracting foreign investment and maintain its position as a strategic platform in the heart of Europe?
Luxembourg aims to maintain its strategic position in Europe by focusing on diversifying economic activities, fostering the data economy, nurturing innovation and technology ecosystems, promoting the circular economy, and supporting startups, scale-ups, and SMEs. Additionally, Luxembourg prioritizes talent attraction and retention to sustain its competitive edge.
We will continue to emphasize international strategic collaboration and promote ourselves as an international business hub. This involves maintaining strong and sustainable economic relations through a network of Luxembourg Trade and Investment Offices (LTIOs) and Economic Attachés across Europe and globally, as well as fostering collaboration between public and private sectors, ensuring alignment with societal needs and concerns.