August 31, 2011, 5:52 pm
The Luxembourg government encourages foreign investment. There are more than 9,000 foreign holding companies in Luxembourg. Despite the current economic crisis, Luxembourg has the highest rate of foreign investment in Europe. More than three-fourths of the foreign capital received by Luxembourg comes from the countries of the European Union. As far as the distribution is concerned, the banking and insurance sectors get most of the foreign capital. In order to stimulate even more foreign investments, the government in Luxembourg formed an agency called the Board of Economic Development, with the role of providing help and information to foreign entrepreneurs, as well as guiding them through the entire procedure of setting up a new business in Luxembourg.
Jobs in Luxembourg
Foreign companies established in Luxembourg created numerous jobs for both resident and non-resident persons. Actually, 33.37% of the domestic employment was offered by companies with foreign capital in 2008, according to STATEC Luxembourg (Central Service for Statistics and Economic Studies). An estimated 125,000 employees commute daily to work in Luxembourg from bordering regions to support its economy.
In 2008, there were 716 foreign affiliates in Luxembourg, with a total capital of 60,104 million EUR. Most of the foreign capital went to companies with activities in the field of banking and insurance. At the moment, there are more than 150 international banks set up in the financial center of Luxembourg.
The number of foreign affiliates was of 778 in 2000, but it started descending until 2008. The main investing country has been Germany, with 29.4% of the foreign inflow in Luxembourg in 2007 and 26.6% in 2008, according to the National Statistics developed during that period in the Grand-Duchy of Luxembourg. In terms of money, Germany invested 10,666 million EUR only in banking services in Luxembourg. Belgium is also an important investor, followed by the United States. The Department of Commerce's Bureau of Economic Analysis reported that total US investment in Luxembourg was nearly 153 billion dollars at the end of 2008.
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