Luxembourg City, the capital of the Grand Duchy, is the largest urban and financial hub of the country. With a population exceeding 135,000 inhabitants, the city is home to over 170 nationalities, making it one of Europe’s most diverse capitals. Its metropolitan area represents nearly 40% of Luxembourg’s GDP, driven by financial services, EU institutions,
real estate, ICT, and professional advisory firms. The city benefits from a highly educated workforce, excellent infrastructure, and international connectivity via the
Luxembourg Airport, located just 6 km away. Luxembourg City’s reputation as a global financial center is reinforced by its AAA credit rating and investor-friendly regulatory framework, offering fertile ground for entrepreneurs, investors, and corporate groups.
Luxembourg City: economic gateway of Europe
The capital has become a magnet for multinational corporations, private equity funds, and fintech ventures due to its strategic position at the crossroads of Belgium, France, and Germany. Key business districts include the
Kirchberg Plateau, where banks, EU institutions, and international firms cluster, and the
Cloche d’Or, an emerging quarter hosting global headquarters, real estate projects, and retail. Meanwhile, the
Ville Haute and
Avenue de la Gare remain important retail and commercial corridors, with professional offices, legal advisers, and notaries concentrated in the historic center. These areas guarantee visibility, prestige, and access to Luxembourg’s vibrant business community.
Luxembourg City’s demography continues to expand steadily, with population growth above 2% annually, supported by strong inward migration of qualified professionals. This fuels demand for housing, office space, and mixed-use developments. Real estate investors are increasingly drawn to large-scale urban projects in Kirchberg,
Gasperich, and
Bonnevoie, with yields stabilizing between 3.5% and 5% depending on asset class. For entrepreneurs, the capital’s dynamic ecosystem spans across finance, ICT, biotech, green technology, and logistics. Luxembourg’s GDP per capita, the highest in the EU, underlines the city’s purchasing power and investment appeal.
Which type of companies can you setup?
Luxembourg City offers multiple legal frameworks for company incorporation, tailored to investors of all sizes:
Most entrepreneurs choose to locate in
Kirchberg,
Cloche d’Or, or the
city center due to proximity to EU institutions, banks, auditors, and service providers. These districts provide immediate access to decision-makers, investors, and regulators, while also benefiting from strong transport infrastructure and international schools for expatriates. Luxembourg City’s central business core is supported by government offices, luxury hotels, conference venues, and a wide range of retail amenities.
Business permits and market entry
Foreign entrepreneurs require a business permit issued by the Ministry of the Economy before starting commercial activities in Luxembourg City. The application is submitted to the
Direction Générale des Classes Moyennes with supporting documents such as identity proof, qualifications, and articles of association. Permits are mandatory for trading, consultancy, professional services, and regulated sectors. Once the permit is approved, companies must register with the
Registre de Commerce et des Sociétés (RCS) and complete tax registrations. Luxembourg City’s strong ecosystem makes it particularly attractive for fintech startups, fund management companies, and real estate investors. Damalion provides tailored support to ensure compliance and accelerate the registration process.
Register your company in Luxembourg City with Damalion
Choosing Luxembourg City as your business location ensures direct access to European and international markets, backed by the country’s robust financial system and business-friendly tax regime.
Damalion assists entrepreneurs and investors with every step of incorporation, including:
Whether you are expanding internationally or launching your first company, Damalion ensures a seamless process so you can focus on building growth in Luxembourg.
Contact your Damalion expert today.
10 best things to do in Luxembourg City, Luxembourg during a 24 hours business trip!
