In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), its shares directed to developed economies has reached an historic low. Macroeconomic fragility and policy uncertainties are driving investors to caution.
Luxembourg offers a business climate favorable to foreign investment. Despite the 2008-9 economic crisis and the remaining uncertainties regarding the global economy, Luxembourg shows the highest rate of foreign investment in Europe. In 2013, more than three-fourths of the FDI received by Luxembourg (USD 31 billion) came from the countries of the European Union. In terms of distribution, the banking and insurance sectors get most of the FDI. The government of Luxembourg has established some measures in order to make the country even more attractive to FDI: fiscal benefits, equipment and construction fields.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|Index of Transaction Transparency*||6.0||6.0||7.0||5.0|
|Index of Manager’s Responsibility**||4.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||7.0||9.0||5.0|
|Index of Investor Protection****||4.3||6.1||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||18,116||9,527||30,075|
|FDI Stock (million USD)||180,801||124,071||141,381|
|Performance Index*, Ranking on 181 Economies||4||-||-|
|Potential Index**, Ranking on 177 Economies||102||-||-|
|Number of Greenfield Investments***||18||13||23|
|FDI Inwards (in % of GFCF****)||168.2||92.3||268.5|
|FDI Stock (in % of GDP)||311.7||225.0||236.3|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
1) the same formalities (registration/enrollment at the Companies' Trade Register, application for a VTA number, initial declaration at the Direct Taxes Administration, etc.)
2) the same obligations (obtaining an establishment authorization for commercial activities, crafts, industrial activities and liberal professions) as in the case of a creation of an enterprise in Luxembourg.
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Last Updates: January 2015