Why Luxembourg is an ideal location for your business
Luxembourg, strategically positioned at the heart of Europe, stands out as a prime choice for industrial real estate investments and business expansion.
Its attractive economic environment offers unique opportunities, particularly through its specialized zones and robust logistics infrastructure, designed to streamline operations and reduce costs for businesses.
Understanding Luxembourg's Freeport: a hub for high-value storage
While often discussed in the context of "free zones," Luxembourg currently operates one official Free Zone: the Luxembourg Freeport. Inaugurated in 2014 and located conveniently near the Findel International Airport cargo terminal, the Freeport is a geographically delimited area where goods from non-EU countries can be stored, processed, or traded indefinitely without customs duties or VAT. This unique facility operates under strict customs control and enhanced anti-money laundering regulations, ensuring security and compliance.
Key advantages of the freeport for businesses:
Fiscal neutrality: Benefit from the suspension of customs duties and VAT on stored goods.
Logistics optimization: Streamline your supply chain with flexible storage and re-export options.
Enhanced security: Access state-of-the-art secure storage, particularly for high-value items.
Market access: Facilitated access to global markets for re-export.
The Freeport has significantly shaped Luxembourg's industrial real estate market, boosting demand for highly secure spaces and increasing the value of surrounding land. It primarily attracts sectors such as the international art market, global trade, high-end logistics, and the wine and luxury goods industries.
Luxembourg's broader industrial real estate & logistics vision
Beyond the Freeport, Luxembourg is rapidly evolving into a major European logistics powerhouse. The Grand Duchy is set to become a "European logistics hub of excellence" by 2030, with substantial investments planned for infrastructure development. The appeal of logistics warehouses is growing rapidly, driven by e-commerce expansion and industrial growth. Luxembourg is particularly favored for its supportive tax and regulatory framework, alongside its commitment to green logistics solutions.
Attractive tax incentives for industrial property investments
For businesses looking to acquire or develop industrial space, Luxembourg offers a suite of compelling tax incentives designed to optimize returns and encourage investment:
Reduced capital gains tax: A favorable tax rate of 10% on real estate capital gains, significantly lower than the standard 20-21%.
Accelerated depreciation: For new industrial assets or those acquired through "Vente en l'État Futur d'Achèvement" (VEFA - off-plan sales), benefit from accelerated depreciation of up to 6% per year for six years.
Investment tax credits: Programs like the "Bëllegen Akt investisseurs" offer tax credits (e.g., up to €20,000 for VEFA acquisitions intended for rental).
Deductions for innovation & sustainability: Obtain tax deductions for projects that include energy-efficient improvements or digital advancements.
While only the Freeport is a classical "free zone," industrial communes such as Bettembourg, Contern, and Differdange indirectly benefit from the overall attractive investment climate and these incentives. To qualify for many of these benefits, conditions often include acquiring new construction or VEFA properties, ensuring an effective rental period of at least two years, and obtaining specific ministerial certificates for certain deductions.
Why choose Luxembourg for your industrial space?
Luxembourg offers a unique blend of strategic location, a highly secure and efficient logistics infrastructure, and attractive fiscal incentives. Whether your business requires high-security storage for valuable assets, a streamlined logistics hub, or a base for industrial operations, the Grand Duchy provides a compelling environment for growth and success. Consider leveraging Luxembourg's advantages to optimize your business operations and real estate investments.
Source: cyriljarnias.com
