Doing business in Luxembourg

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Luxembourg, officially the Grand Duchy of Luxembourg is a relatively small country, entirely landlocked and bordering Germany to the East, Belgium to the West and Northwest and France to the South and Southwest. Historically sharing much of its customs and values with its neighbours, in particular with Germany. Since the mid-20th century Luxembourg has been a strong advocate of international cooperation in politics and business and has evolved to become one of Europe’s biggest investment management centres.

Nearly 50% of the country’s population is made up of expatriates who have relocated there for work, making Luxembourg’s population among one of the fastest growing in the world. Despite its modest size, Luxembourg boasts one of the world's highest standards of living and plays a key role on the European stage as a founding member of the EU. The capital, Luxembourg City, is a recognised UNESCO World Heritage site that effortlessly blends medieval castles and roads with skyscrapers home to multinational corporations, banks, and European political institutions (Luxembourg City is one of three official EU capitals and the seat of the European Court of Justice).

The official language of Luxembourg is Luxembourgish, a West Germanic language. French and German are also established as official administrative languages as well as popular in local media and education. In multinational teams and many companies, especially in finance, IT and EU institutions, English is commonly spoken. The non-Luxembourgish population speak their native tongue but will also be well versed in at least one of the three main languages (Luxembourgish, German, and French) and/or English.

Business Culture in Luxembourg

Boasting one of the highest GDPs per capita in the world, Luxembourg has a highly advanced economy driven by a productive services sector and a strong financial industry. Its financial services sector is among the most robust in Europe, and the country is the world’s second-largest hub for investment funds after the United States. It is also a key player in private banking, insurance, and reinsurance. Thanks to its political stability, strong regulatory environment, and multilingual workforce, Luxembourg continues to attract international financial institutions and asset managers.

The country is also developing a dynamic ICT and digital economy, underpinned by strong digital infrastructure, cybersecurity expertise, and a commitment to innovation. It is home to data centres, fintech firms, and e-commerce platforms that benefit from its central European location and secure digital environment. Luxembourg is also a leader in space and satellite technology, supported by the Luxembourg Space Agency and a pioneering legal framework for space resources. Companies like SES, one of the world’s largest satellite operators, highlight its global influence in this sector.

Meanwhile, logistics, biotech, and clean technologies are gaining momentum, supported by government investment and international partnerships. Traditional sectors like steel and manufacturing remain important but have evolved through modernisation and specialisation.

Luxembourg's blend of individualism and collectivism creates a balanced and adaptable business culture. In corporate environments dominated by international firms there is a clear lean towards merit-based career advancement, clear accountability, and a preference for direct communication. Employees are generally expected to take initiative and work independently, and decision-making processes in companies are often delegated to individuals or small leadership teams. This individualistic orientation also makes Luxembourg attractive to entrepreneurs and investors, who find the environment supportive of innovation and personal enterprise.

However, Luxembourg’s collectivist elements stem from its deep-rooted social welfare system, communal mindset, and tripartite tradition—where government, labour unions, and employers cooperate in policymaking. Moreover, with nearly half the population being foreign-born (and many cross-border workers from France, Belgium, and Germany), teamwork, intercultural cooperation, and consensus-building are essential features of daily business life.

In practice, this means that while individuals may be recognised for their contributions, collaboration and harmony within teams are highly valued. Meetings often aim for group consensus rather than top-down directives, and there is a strong emphasis on maintaining respectful interpersonal relationships, particularly in multicultural workplaces.

In international companies, workplace formality has eased - first names are used more quickly than in the past, and dress codes are often business casual except in traditional finance or legal environments.

The preferred management style throughout Luxembourg is structured yet collaborative, combining elements of hierarchical decision-making with a strong emphasis on consensus and diplomacy. Managers are generally expected to lead with clarity and professionalism, but without being overly authoritarian. Respect for rules, clear delegation of responsibilities, and well-defined goals are important, but so is the ability to listen and adapt to a diverse team’s input.

Luxembourgish managers often value efficiency, punctuality, and reliability, yet they also foster an environment of mutual respect and open communication. Employees are encouraged to take initiative within their areas of responsibility, and team cohesion is seen as essential for long-term success. Given the international nature of the workforce, managers in Luxembourg are culturally sensitive, fluent in multiple languages, and adept at navigating differences in working styles and expectations.

Luxembourg also places a strong emphasis on work–life balance, with shorter average working hours than some neighbours and generous annual leave (typically 25–30 days plus public holidays). This shapes meeting scheduling and after-hours expectations.

Communication in Luxembourg is shaped by its multilingual and multicultural society, resulting in a style that is generally polite, respectful, and moderately direct. While business communication tends to be clear and to the point, especially in professional settings, there is also a strong emphasis on courtesy and diplomacy, particularly when addressing sensitive topics. Nonverbal cues are subtle, and it's common to maintain a professional tone, even in casual conversations.

While messages are generally delivered in a direct and efficient manner, especially in written formats like emails or reports, there remains a strong emphasis on politeness and respect, particularly in face-to-face interactions.

In today’s workplace, hybrid and cross-border collaboration is common, so meetings may involve participants from multiple countries, often connecting remotely. While punctuality and
courtesy remain important, flexibility, cultural sensitivity, and digital communication skills are increasingly valued.