LOW TAX COUNTRIES
Andorra
Anguilla
Antigua & Barbuda
Aruba
Australia
Bahamas
Barbados
Belize
Bermuda
British Virgin Islands
Cayman Islands
Cook Islands
Costa Rica
Cyprus
Dominica
Dominican Republic
Gibraltar
Hong Kong
Isle of Man
Jersey & Guernsey
Liechtenstein
Luxembourg
Malta
Mauritius
Panama
Singapore
St.kitts & Nevis
Switzerland
Turks & Caicos
Vanuatu
Index of Articles
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LUXEMBOURG
About Luxembourg
Founded in 963, Luxembourg became a grand duchy in 1815 and an independent state under the Netherlands. It lost more than half of its territory to Belgium in 1839, but gained a larger measure of autonomy. Full independence was attained in 1867. Overrun by Germany in both World Wars, it ended its neutrality in 1948 when it entered into the Benelux Customs Union and when it joined NATO the following year. In 1957,
Luxembourg became one of the six founding countries of the European Economic Community (later the European Union), and in 1999 it joined the euro currency area
Luxembourg is a parliamentary representative democracy with a constitutional monarchy, ruled by a Grand Duke. It is the world's only sovereign Grand Duchy.
Luxembourg is a founding member of the European Union, NATO, the United Nations, Benelux, and the Western European Union, reflecting the political consensus in favour of economic, political, and military integration.
Luxembourg City, the capital and largest city, is the seat of several institutions and agencies of the European Union.
Luxembourg lies on the cultural divide between Romance Europe and Germanic Europe, borrowing customs from each of the distinct traditions. While French and Luxembourgish are the predominant languages in daily life and on the streets,
Luxembourg remains a trilingual country; French, German, and Luxembourgish are official languages. Although a secular state, Luxembourg is predominantly Roman Catholic.
| Liechtenstein |
|
| Capital |
Luxembourg
49°36′N 6°7′E |
| Official languages |
French, German, Luxembourgish |
| Area |
2,586 km² (176th)
999 sq mi |
| Population
|
465,000 (168th) |
| GDP (PPP)
|
$29.37 billion (92nd) |
| per capita
|
$69,800 (1st) |
| Currency |
Euro (€) (EUR) |
| Time zone |
(UTC+1) |
| Dialling code |
+352 |
LUXEMBOURG ECONOMY
Luxembourg is a constitutional monarchy, has a land area of about 1,000 sq miles, a population of 468,000, and is sandwiched between Belgium, France and Germany. With Belgium and the Netherlands, it forms part of Benelux, which was a precursor of the EU.
Luxembourg was a founder-member of the EU and hosts many of the EU's financial institutions. Languages spoken are French, German and English, with Luxemburgish the everyday language of Luxembourgers.
Economy Buoyant Based on Financial Services
Luxembourg's economy was dominated by steel production, but since the Second World War the Government has successfully encouraged development of a diversified financial sector. Tourism is also important. In Europe, Luxembourg has the second most extensive banking industry after London (220 banks).
The Luxembourg private banking industry is possibly Europe's biggest. The Stock Exchange specialises in collective investment funds and many of the 4,000 Luxembourg-registered funds are also listed there.
Luxembourg is the richest country in the world according to 2006 figures, with a GNP per head at purchasing power parity of US$56,000. GDP in 2005 was US$31bn. Unemployment is low.
Luxembourg's Lowtax Specialisations
Luxembourg is a high-tax country, but has specialised types of 'holding' company which are tax-exempt. There are 18,000 of these - they are suited to holding international investments, but are not allowed to trade themselves. UCIs (collective investment funds) are also tax-exempt.
As a member of the EU, Luxembourg finds itself in an uncomfortable situation squeezed between the EU/OECD attack on harmful tax competition and its dependence on its successful 'offshore' sector. The EU's Savings Tax Directive also threatens problems for Luxembourg banks and UCIs, although after threatening to veto the EU's plans at the end of 2002 because competitor Switzerland had not offered 'equivalent' measures, the country fell into line in January, 2003, and has applied a withholding tax to non-residents' investment returns, since the Directive came into force in July, 2005.
Income Tax and Municipal Business Tax on Profits give a 30% marginal corporation tax rate; the rates for individuals are higher, and they pay a wealth tax in addition. The tax system is mostly based on German originals, apart from VAT which is of course an EU-inspired tax.
Immigration Controlled by Housing and Work Permits
EU citizens have freedom of movement in Luxembourg of course, but other nationals need residence and work permits.
~ Books About Luxembourg ~
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