Luxembourg’s international population and great geographical location open up myriad possibilities for entrepreneurs to develop their businesses. Here Culture Trip brings you an exclusive excerpt from creative content and publishing company Startup Guide’s ultimate guide to its capital city: Startup Guide Luxembourg.
Luxembourg City, the capital of one of Europe’s smallest countries, has a highly diverse, multilingual and well-educated population. Frankfurt, Paris and Brussels are only a few hours’ drive away, and London, Amsterdam, Milan and Barcelona can be reached in just over an hour by plane. Alongside the official languages of French, German and Luxembourgish, English is widely spoken; and there are also extensive Portuguese, Chinese, Italian and Balkan communities. New arrivals are attracted to Luxembourg for the country’s robust economy, which has grown by 3.6 percent GDP per year on average since 1990, and because the state encourages innovation, with financial support provided for R&D and targeted assistance offered for startups and growth firms.
Companies and public authorities are used to the constant influx of new residents. EU citizens and those from the European Economic Area and Switzerland will have little problem with the residency paperwork. People from further away seeking to work longer than three months have to apply for an autorisation de séjour temporaire (temporary residence permit) before they arrive. Once in the country, you can apply for long-term residence and work permits. Nevertheless, the immigration authorities are quite relaxed and will generally be helpful and give reasonable leeway.
It’s easy for Europeans to use their home online-bank services to pay bills and withdraw cash in the early days, although this may lead to charges being levied. The health system is open to all EU citizens under the European Health Insurance Card (EHIC) scheme, but non-EU citizens may need private health insurance before they can obtain a visa and the right to stay. Employees and their families are automatically covered by the state health system, but otherwise private insurance is required.
Welcoming migrants is a Luxembourgish trait. Luxembourgers are traditionally reserved people, but locals generally have an open, welcoming attitude to new arrivals. Multiculturalism is widely seen as a virtue for the economy and society, with all communities encouraged to uphold traditions. Luxembourg is traditionally close to German culture with a strong Belgian/French influence. These norms are widely adopted by immigrants.
The passing of the seasons and key dates are marked with events and festivities, and the highlight is an exuberant street party held on June 22, the eve of National Day. There are also Christmas markets, spring fairs, and many open-air events such as concerts, parties, processions at Carnival time, and cinemas in the summer. This is in addition to the wine festivals on the nearby Moselle river and many other fun social events. That said, the city can often feel quiet during the week and might not be to the taste of those who seek vivacious street life.
Non-housing costs are about 10 percent higher than other business capitals in the Western eurozone. Only a few low-cost airlines operate from Luxembourg airport, but other airports about two hours away serve the low-cost market. Domestic trains and buses are plentiful and relatively cheap (€2 per journey).
Crèches generally have long waiting lists and cost around €1,500 per month per child, but all residents receive a subsidy of €200 to €1,300, depending on their income. State schools are free of charge, with teaching in Luxembourgish, French and German, and increasing numbers of state programs are being offered in English too. Private English-language schools cost around €15,000 per year per child.
Housing is relatively expensive. Renting a two-bedroom, 80-90 m2 apartment in the outskirts of Luxembourg City starts at about €1,500 per month excluding bills. By commuting about 20 km from the center, tenants pay about 20 percent less.
Housing is generally good quality and well appointed, but rental agreements are relatively onerous. Tenants are asked to pay two or three months’ rent as a deposit as well as a month’s rent up-front, and agency fees are generally equivalent to a month’s rent plus 17 percent value-added tax. Landlords can retain some or all of the deposit to pay for damage caused during your tenancy, and some can be overzealous in the way damage is interpreted, so you should conduct an inventory of the state of the property with the owner before you move in and take photographic evidence if possible. Some agents will help with this process.
Rental contracts are generally one, two or three years long, and tenants must give three months’ notice at the end of each period to break the contract, otherwise it renews automatically. Contracts can usually only be cancelled prematurely with mutual consent. If you leave before three years, you’ll normally be required to pay for the property to be repainted. New arrivals need to register with their commune (local authority) at the local marie (town hall). There are several online agencies – athome.lu and habiter.lu are popular and in English. Independent, fee-based price comparison site houser.lu is also useful for giving some context.
There are several private companies offering serviced office rental space. Alternatively, contact the Chamber of Commerce’s “House of Startups” opening early 2018, the “House of Entrepreneurship”, or the public-private business development agencies Luxinnovation and nyuko. They have information about renting in a startup incubator in the capital or nearby. These public-private agencies provide practical help for seeking a working space and offer a range of services to new arrivals. There are also dedicated incubators at the Luxembourg House of Financial Technology and the City Incubator, which is also due to open in early 2018. The government has been providing and developing these facilities for startups since the late 1990s. Demand for these spaces is high, and there are burgeoning clusters, but they still lack the size and critical mass seen in the world’s leading startup capitals.
If you’re an EU citizen or citizen of EEA countries and Switzerland, you can reside, work or study in Luxembourg for more than three months if you have a valid national ID card or passport. You must also be a salaried employee, be self-employed, or demonstrate that you have sufficient resources to ensure that you or your family will not be dependent on the social welfare system; and you must have medical insurance. Third-country nationals seeking to stay for more than three months must apply for an autorisation de séjour (authorization to stay) with the Immigration Directorate of the Ministry of Foreign Affairs. Authorisations de séjour are granted to employed or self-employed people, sportspeople, students, pupils, trainees, volunteers, researchers or family members, or may be given for other private reasons. Full details are available in English at luxembourg.public.lu.
Meeting people is relatively easy as most residents are immigrants themselves, giving them an open attitude towards new arrivals. Many clubs have a web presence, and tips are given in the media aimed at expats. There are socially-oriented sports tournaments (everything from darts to touch rugby, five-a-side soccer, cricket and golf) as well as choirs, amateur theater and musical societies, literary discussion evenings, hiking groups, charity and church volunteering, women’s groups, and more. This is besides numerous generalist and specialist business-networking organizations. There’s also a good choice of music concerts with world-class pop and classical artists, and occasional English-language theater performances. The American Women’s Club publishes a detailed paperback guide called “Living in Luxembourg,” which features many tips to help new arrivals find their feet.
There are two aspects to setting up a business in Luxembourg: the administrative tasks that must be completed and access to startup loans and grants. Luxinnovation and the House of Entrepreneurship are well-informed, efficient, official organizations that offer one-stop-shop advice to entrepreneurs on all aspects of these tasks. Depending on the sector, setting up a business can require a certain number of administrative procedures to be completed. For example, financial businesses and some professional services firms need to receive prior approval from regulators. For certain skilled trades, entrepreneurs must be able to prove their professional competence. A limited liability company can be founded with just one euro of startup capital. However, for many freelance and sole-trader activities, you need only to notify the Régistre de Commerces et des Sociétés (Trades and Companies Register) and apply for a value-added tax registration number.
Founded in 2014 by Sissel Hansen, Startup Guide is a creative content and publishing company that produces guidebooks and tools to help entrepreneurs navigate and connect with different startup scenes across the globe. Startup Guide books are in 18 different cities in Europe and the Middle East, including Berlin, London, Tel Aviv, Stockholm, Copenhagen, Vienna, Lisbon and Paris. It also has two physical stores in Berlin and Lisbon to promote and sell products by startups.