search

For the second time, professional services network EY has published a Luxembourg edition of its Attractiveness Survey. The study analyses foreign direct investment (FDI) in Europe and Luxembourg. It also includes the perceptions of attractiveness of Europe as well as of the Grand Duchy.

FDI remains stable in Europe

Top countries in terms of foreign direct investment projects in Europe 2022The number of foreign direct investment projects announced in Europe increased by a modest 1% in 2022 compared to the year before. While this is yet another step on the road to recovery from the COVID-19 pandemic, the limited progress probably reflects the economic uncertainties resulting from the war in Ukraine. Nevertheless, EY refers to it as “disappointing” as the number of projects is still lower than in 2019 and 10% below the top year of 2017.

France attracts most projects, Luxembourg #1 in terms of foreign direct investment per capita

France attracted the highest number of FDI projects in Europe in 2022, followed by the United Kingdom and Germany. Luxembourg is in 23rd place but experiences a significant growth of 48% in the number of projects compared to 2021.

Top countries in terms of FDI per capita in Europe in 2022For the second consecutive year, Luxembourg comes out as number 1 in Europe in terms of foreign direct investment projects per capita, followed by Cyprus, Spain, Portugal and Belgium. While this list, unsurprisingly, is dominated by smaller countries with a relatively limited population, France is still in 8th position.

Luxembourg’s biggest growth drivers were to be found in the sectors that support the financial and industrial sectors. Investment in the digital/IT/software services sectors tripled.

“Luxembourg’s biggest growth drivers were to be found in the sectors that support the financial and industrial sectors. The business services sector’s FDI increased by three (four projects in 2022 vs. one in 2021) while investment in the digital/IT/software services sectors tripled (nine in 2022 vs. three in 2021). Altogether, the ‘services’ sectors make up one-third of the FDI market share,” the report states.

Luxembourg: An attractive destination

67% of the investors covered in the EY study – mainly representing industries such as the pharmaceutical, finance, business or professional services and chemical sectors – said that they plan to invest in Europe in the next year. This is a marked increase from 53% in 2022, and the highest indication of confidence in 20 years.

As a central spot in Europe, Luxembourg is a sensible location for firms to conduct their European expansion activities.

Most attractive European countries for FDI In 2023The three European countries considered as most attractive for FDI are Germany, France and the UK. Luxembourg is in 8th place. More investors plan to increase sales and marketing in Luxembourg than in the rest of Europe. “As a central spot in Europe, Luxembourg is a sensible location for firms to conduct their European expansion activities, and this may explain why so many industrial, consumer, financial, chemical, pharmaceutical and high-tech firms cited plan to increase investment in this particular business area,” the report points out.

Investors rate Luxembourg highly for the availability of a workforce with technology skills, its rollout of 5G and its network of technology start-ups and research institutions. “These positive perceptions align strongly with the reality of FDI, as Luxembourg’s digital/IT/software sector has doubled, making up 24% of FDI sector market share,” EY comments. “In terms of fields with a strong technology component, we witness persistent growth in Luxembourg’s space industry, where projects are linked to space companies conducting R&D focusing on transport, manufacturing, supply and logistics.”

In order to improve its attractiveness, respondents say that Luxembourg should focus on supporting high-tech industries, innovation and SMEs. They also call for the development of education and skills.

Read more

ESRIC Start-up Support Programme welcomes the five new ventures

19-09-2023

Launched in 2021, the Luxembourg-based Start-up Support Programme is the first worldwide incubation programme, entirely dedicated to the field of space resources utilisation.
Read more

“Luxembourg exceeds my expectations”

12-09-2023

Korean start-up Posture AI addresses a common health problem: backpain. After developing its artificial intelligence solution using smart posture devices from its base in South Korea, the company has now chosen Luxembourg as its base for targeting the European market and moving forward with the data dimension of its products and services.
Read more

New law introduced in Luxembourg to facilitate the hiring of skilled labour

05-09-2023

The new law simplifies the hiring of non-EU nationals and grants family members of third-country nationals holding a residence permit access to the labour market as soon as they arrive in Luxembourg.
Read more

"Supporting the development of the start-up ecosystem in Luxembourg"

24-08-2023

Minister of the Economy, Franz Fayot, discusses the recent startup roadmap “From Seed to Scale” designed to support the ecosystem's continuous expansion as it navigates a new phase of maturity.
Read more

Inflation in Luxembourg continues to rank among the EU’s lowest

22-08-2023

Luxembourg recorded the second lowest annual inflation rate in the EU, according to the latest July figures shared by the statistical office of the European Union, Eurostat.
Read more

Resources all news

Fermer