Contracting in Luxembourg
Are you planning to be contracting in Luxembourg? These pages will give you an overview about Luxembourg as a country, what’s required of you to be contracting in Luxembourg. Learn more about how to apply for Visa and Work Permit if necessary, the percentage of the Luxembourg Income Tax and how the Luxembourg Social Security works. However, for more practical information, download our guide Start Contracting in Luxembourg or our International Contracting Guide.
Luxembourg is the least populated country in the European Union (8th least-populous country in Europe) with only 465,000 inhabitants. In fact, it is also the 20th smallest of the 194 independent countries in the world. Luxembourg as a representative democracy with a constitutional monarch. It is headed by a grand duke, Henri, Grand Duke of Luxembourg who is the world’s only remaining grand duchy. Furthermore, it is a highly developed country, with an advanced economy. According to the United Nations in 2014 it has the world’s highest GDP (PPP) per capita.
Luxembourgers speak Luxembourgian, or Letzeburgesch, the original dialect of the country, and also French and German. However, all three are official languages. Letzeburgesch, French, and German are all languages of instruction in primary schools. In addition, French is the most common language of instruction in secondary schools and government publications are generally in French. English is also spoken, thought.
As a consequence of particular repeated invasions by its neighbour countries, especially in World War II, in the country there is strong will for mediation between France and Germany. Consequently, it led to the foundation of the European Union. Luxembourg is also member OECD, United Nations, NATO, and Benelux, reflecting its political consensus in favour of economic, political, and military integration. In addition, Luxembourgish citizens had visa-free or visa-on-arrival access to 172 countries and territories in 2016 . This was ranking the Luxembourgian passport 6th in the world, tied with countries such as Canada and Switzerland.
Luxembourg as a landlocked country in Western Europe, has an area of 2,586 sq km (998 sq mi). It is bordered by Belgium to the west and north, Germany to the east, and France to the south. Due to this, its culture, people and languages are highly intertwined with its neighbours, making a mixture of French and Germanic cultures. Luxembourg`s capital is Luxembourg City. In fact, together with Brussels and Strasbourg it is one of the three official capitals of the European Union and the seat of the European Court of Justice (the highest juridical instance in the EU).
The country itself is divided into two distinct geographic regions: the rugged uplands (Oesling) of the Ardennes in the north. The average elevation is there about 450 m (1,476 ft) with the highest point, Buurgplaatz, at 559 m (1,834 ft); and the fertile southern lowlands, called Bon Pays (Good Land), with an average altitude of 250 m (820 ft).
How to start contracting in Luxembourg?
Requirements to work in Luxembourg
About 35 percent of the workforce is made up of foreign workers, mostly commuters from neighbouring countries which means that multi-lingual work environments are common. French, German, and English are mainly the languages of business correspondence. Due to Luxembourg’s location in the centre of Europe and these three languages (plus Luxembourgish), a multi-lingual requirement is attached to many jobs in Luxembourg. Therefore Dutch, Italian, Spanish and Portuguese can also be a bonus.
Read more about Work Requirements in Luxembourg.
Luxembourg Visa and Work Permit
Although Luxembourg is a member of the Schengen Area, Schengen visa holders are able to move freely between the states on a short-term basis for up to 90 days, for either the purpose of tourism or business. With a Schengen visa, it is possible to enter one country and travel freely throughout the Schengen zone and passport holders of certain other countries can benefit from the same rule.
Read more about Visa and Work Permit for Luxembourg.
Luxembourg Income Tax
Individual income tax is levied on the worldwide income of individuals residing in Luxembourg, as well as on Luxembourg-source income of non-residents. Luxembourg income tax liability is based on the individual’s personal situation (e.g. family status). For this purpose, individuals are granted a tax class. Three tax classes have been defined – Class 1 for single persons, Class 2 for married persons as well as civil partners (under certain conditions) and Class 1a for single persons with children as well as single taxpayers aged at least 65 on 1 January of the tax year.
Read more about Income Tax in Luxembourg.
Luxembourg Social Security
In general, Luxembourg’s social security system is made up of the following schemes: illness, long-term care insurance, maternity, work-related accidents or illnesses, pension, family benefits, disability, survivor’s insurance, unemployment, early retirement, guaranteed minimum income.
Read more about Social Security for Luxembourg.