Despite its relatively small size, Luxembourg is one of the world’s largest financial centers. With more than €4.8 trillion in total assets in management, it’s not surprising that international investors, both private and institutional, flock to the Grand Duchy to further expand their portfolios.
Opening a bank account in Luxembourg is a relatively simple and straightforward process. Expats and non-resident investors can open a bank account in one of the 126 different banks in the country, the majority of which are subsidiaries of foreign banks. In this article, we will provide you with all the information that you need to successful open a bank account in the Grand Duchy. Here are the most Frequent Asked Questions.
1. What features does a Luxembourg bank account have?
A Luxembourg bank account will come with an International Bank Account Number (IBAN). The International Bank Account Number (IBAN) facilitates the smooth money transfer between other countries that are included in the Single Euro Payment Area. In some cases, opening an account is free of charge, while there are also some financial institutions that charge between €2 and €10 monthly depending on the specific service that your require.
While Luxembourg is a highly sophisticated and advanced financial hub, more than half of all financial transactions are still done using cash. with this in mind, it is therefore crucial for interested parties to select a bank that charges reasonable fees for cash withdrawals. Due to its strategic location in the European continent, the Luxembourg banks offer their services and support in various languages, including German, French, Luxembourgish, Italian, Portuguese, and English.
2. Who is eligible to open a bank account in Luxembourg?
Individuals aged 18 and above are eligible to open a bank account in Luxembourg, provide they live or are committed to gain resident status in the country, whether by way of gainful employment or admission to a Luxembourg-based university. Banks in the Grand Duchy will require proof of residence in Luxembourg before an individual can be allowed to open a bank account.
For individuals under the age of 18, an adult, be it a parent or guardian, may open a bank account on their behalf.
3. Where can one find their tax number?
For new residents in Luxembourg, you can find your 13-digit tax number on your social security card.
4. What are the requirements for opening a bank account in Luxembourg?
If you’ve met the basic requirements listed above, let’s take a closer look at the other documentation that you will need to successfully open a Luxembourg bank account.
- Passport and/or national identification card
- Certificate of residence in Luxembourg
- Proof of address that can come in the form of a rental contract or utility bill
- Proof of income
- Proof of employment or school enrolment
If you need a bank account that provides you to access more advanced functions, including credit, loans, and overdraft, additional documents may be requested by your preferred bank:
- Income statement
- Credit score
- Luxembourg tax number or tax number from your country of origin
5. What is the typical process of opening a bank account in Luxembourg?
The majority of Luxembourgian banks allow prospective clients to process bank account creation online. There are even banks that will let you process an application while you’re abroad, given you can submit the necessary paperwork. Many banks require prospective clients to send their documentation by post or submit them in person upon card pickup.
The standard process of opening a bank account in Luxembourg are as follows:
- Determine the required documents and print them out for submission to the bank.
- Send your documents via post or schedule an appointment for successful submission at your preferred bank’s local branch.
- You may be required to fill up a questionnaire and undergo identify verification with a bank personnel.
- If you are opening a bank account online, you must undergo a digital verification process.
- It will take a few days for your confirmation, card, PIN, and other required documents to arrive via post.
6. How do you open an online banking account?
If you do not have the luxury of time to gather documents and schedule in-person appointments to your bank of choice in Luxembourg, many banks offer online banking to residents and non-residents. This means that you can have a bank account successfully set up even before you arrive in the country.
Many Luxembourg banks feature an online app. Once you’ve downloaded the app, simply upload a copy for your identification card and fill out the online in-app verification process. You will be provided with a unique PIN and you’re ready to customize your account to your needs.
Before applying for an online account, conduct due diligence and confirm that your preferred financial institution is dully licensed in Luxembourg.
On the other hand, if you want a credit card linked to your Luxembourg bank account, you may be required to submit additional documents to prove your capacity to pay your bills. Pay slips from your employer will serve as proof of income, although some banks may require additional documentation. Bear in mind that some financial institutions opt to delay offering credit capabilities to brand-new customers. To resolve this issue, it is recommended to establish your financial solvency, so you can gain access to credit capabilities.
7. Can I open a bank account with multiple account holders?
A joint account may be opened in Luxembourg. If you wish to open an account with other people for various reasons such as house shore or vehicle purchase and registration, every individual in the account will be deemed to submit their respective documents. For online banking, applicants may apply up to two account holders only. On the other hand, if you wish to open a joint account with more than two account holders, personal appearance at the local bank branch is a requirement.
8. How much are the standard banking fees and charges assessed by Luxembourg banks?
Before opening a bank account in Luxembourg, you need to gain deeper understanding of applicable bank fees and charges. It is recommended to read the fine print to save you money in the long run.
Check out the regular charges that your chosen bank assesses to keep your account open or use its debit and credit card functionalities. Other fees that you need to familiarize yourself with are withdrawal fees. While some banks won’t charge anything for withdrawals, there are some that levies a certain fee for every ATM withdrawal transaction.
For international investors and non-resident that may need to move money between accounts that use different currencies, bear in mind that you will be assessed with additional charges. Money transfers are extremely expensive transactions, and one of the ways banks earn profit from providing service to their clients. With all these in mind, it is best to look for a Luxembourg bank that offers low and transparent fees.
As a premier consulting firm for foreign investors, Damalion offers a full suite of solutions to assist in successful incorporation of a business in Luxembourg. We can assist you in the processing of opening a bank account in Luxembourg to ensure smooth and hassle-free transactions in the Grand Duchy. If you wish to learn about the process of opening a Luxembourg bank account, feel free to reach out to a Damalion expert today.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.