Luxembourg: Buying and Selling

Market Access Procedures

International Conventions

Party of the International Coffee Agreement 2007

International Economic Cooperation

Member of the European Union, WTO, OCDE

Non Tariff Barriers

In accordance with its European Union membership, Luxembourg applies the European Union (EU) rules that are in force in all European Union countries. While the EU has a rather liberal foreign trade policy, there is a certain number of restrictions, especially on farm products, following the implementation of the CAP (Common Agricultural Policy): the application of compensations on import and export of farm products, aimed at favoring the development of agriculture within the EU, implies a certain number of control and regulation systems for the goods entering the EU territory. Moreover, for sanitary reasons, regarding Genetically Modified Organisms (after being allowed in the European territory), their presence should be systematically specified on packaging. Beef cattle bred on hormones is also forbidden to import. The BSE crisis (often called the "mad cow disease") urged the European Authorities to strengthen the phytosanitary measures to make sure of the quality of meats entering and circulating in the EU territory. The principle of precaution is now widespread : in case of doubt, the import is prohibited until proof is made of the non-harmfulness of products. See the conditions of importing fresh meat.

Customs Duties and Taxes on Imports

Customs duty for non-EU member countries is usually rather low (around 4.2% on average). There are however three sectors and product categories which are subjected to a special higher tarification, such as the clothing sector, fabrics and agro alimentary products (around 17.3%).

Customs Classification

Customs duty tariffs are calculated Ad Valorem based on their CIF value, in compliance with the Common Customs Tariff (CCT). In order to get exhaustive regulations and customs tariffs rates regarding their products, exporters shall refer to the TARIC code and its database, which includes all applicable customs duties and customs trade policy measures for all the goods.

Import Procedures

As part of the "SAFE" standards set forth by the World Customs Organization (WCO), the European Union has set up a new system of import controls, the "Import Control System" (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Programme eCustom, has been in effect since January 1, 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.
The official model for written declarations to customs is the Single Administrative Document (SAD). The SAD describes goods and their movement around the world and is essential for trade outside the EU, or of non-EU goods. Goods brought into the EU customs territory are, from the time of their entry, subject to customs supervision until customs formalities are completed.

Since July 1, 2009, all companies established outside of the EU are required to have an EORI number if they wish to lodge a customs declaration or an Entry/Exit Summary declaration.

The TARIC (Tarif Intégré de la Communauté), is available to help determine if a license is required for a particular product. Moreover, the European Commission maintains an export helpdesk with information on import restrictions of various products.

To get further information on customs policies in the European Union, please visit the European Commission page on Customs Union.

The website of the Luxembourg Customs Administration (in French) provides more detailed information on the import process and requirements.

For Further Information

Customs duty and Excise Tax Administration

Reaching the Consumers

Marketing opportunities

Consumer Profile

With a GDP per capita of USD 131,780 (IMF, 2021), Luxembourgers are the wealthiest consumers in the world. Nonetheless, the growth in economic activity has slowed down in recent years and the gap between Luxembourgian and European consumers has narrowed. The former remains by far the biggest spender in the EU, however, consumption increases at a slower rate than in the rest of the Union: the Luxembourgian spent on average 35% more than their European counterpart in 2019 as opposed to 40% more in 2014 (Eurostat, latest data available).

The Luxembourgian population is more dynamic than the EU average as many European citizens immigrate to the country to enjoy high living standards and income levels. The median age is 39.5 years (EU average 43.9 years) (Eurostat, 2020) and the population growth rate rose to 1.94% in 2019 (EU average 0.16%) (World Bank, latest data available).

Consumers Associations

The Luxembourg Consumers Union (ULC)
European Consumer Center of Luxembourg

Main Advertising Agencies

Mikado Publicis
H2A
A3Com
IP Luxembourg
Fish and Chips

Distributing a Product

Evolution of the Sector

Luxembourg City is Benelux’s fourth most attractive location for international and national retailers. The city benefits from a broad consumer base and strong retailer demand. Luxembourg City has a central location in the country and is relatively dense: the city contains approximately 20% of the country’s inhabitants on 2% of its territory. More than two-thirds of the city’s inhabitants are foreign, mainly originating from other countries of the European Union. This is a consequence of the presence of a number of European institutions. Luxembourg has, by far, the highest gross domestic product per capita (in purchasing power standards) in the European Union, as well as the highest actual individual consumption. Luxembourg’s high spending power makes it attractive for luxury and premium retailers.

The main shopping zone in the city centre is along Grand- Rue and its adjoining streets, including Avenue de la Porte- Neuve, Rue des Capucins and Place d’Armes. A large variety of mainstream and premium brands are located in the area, with drivers such as H&M, Zara, Massimo Dutti, Jack & Jones and Tommy Hilfiger. The city centre also houses a luxury cluster on Rue Philippe II, where haute couture houses such as Cartier, Chanel and newcomer Dior are located, and which will extend in the future towards the soon-to-open Royal-Hamilius shopping centre. The prime retail zone of the city is located within walking distance of the old city centre and close to office areas. This prime catchment area of the country, and the wider region, includes a small luxury cluster that may extend in the future towards the Royal-Hamilius project. This is part of the international expansion programme of the Hudson‘s Bay Company, a Canadian retail business group that recently acquired Galeria Inno. Another prime retail zone near the central train station boasts high footfall and is where many international mainstream brands can be found. The central commercial zone will experience a wave of expansion with the opening of two large shopping centres, the first of which will be located within the Royal-Hamilius development. However, the COVID-19 crisis has delayed the delivery of the Royal-Hamilius shopping centre. The second mall is the Cloche d'Or shopping centre (75,000 m²) in the south of the city, which will offer 120 retail units as well as an Auchan hypermarket.

Four companies are currently controlling the large-scale distribution market: Cactus, a Luxembourger company, the Louis Delhaise group, the second largest actor, the Monopol group and the Auchan group. This sector profits from the high consumer spending of households, which is among the highest in the world ( per capita consumer spending is for example 70% higher than that of their Belgian and Dutch neighbors).

Market share

The revenue in the Food & Beverages segment is projected to reach US$51m in 2021. It is expected to show an annual growth rate (CAGR 2021-2025) of 3.09%, resulting in a projected market volume of US$58m by 2025. (Statistica) The mass retail in Luxembourg is dominated by 4 major groups:

• the Luxembourgish Cactus is the leader in the distribution sector in Luxembourg and owns the following brands: Cactus Supermarché, Cactus Marché, Cactus Shoppi and Cactus Hobbi
• the Louis Delhaize Group, which is the 2nd largest player in the country’s mass retail. It includes brands such as Cora.
• the Auchan group, with 1 hypermarket and four drive-through supermarkets.
• German discount supermarket chains Aldi and Lidl

These groups share a market of 626,100 inhabitants. (National Institute of Statistics and Economic Studies of the Grand Duchy of Luxembourg, 2020)

Retail Sector Organisations

The Union of Luxembourg companies (employers' trade union)
The Luxembourg Commerce Confederation
Luxembourg Chamber of Commerce
Luxembourg Ministry of Economy

E-commerce

Internet access

Luxembourg has one of the highest internet penetration rates in the world, at 95.2% (also thanks to the small population of around 576,000 people). The Grand Duchy is above the average of the developed countries in terms of access to smartphones (91% compared to 80% of developed countries, Deloitte). Luxembourg ranks 5th out of the 28 EU Member States in the Digital Economy and Society Index (DESI) 2018 published by the European Commission. According to the latest data available, in 2016 93% of individuals in Luxembourg accessed the internet daily, 97% weekly, and 1% less than once a week (Statista). The most popular web search engines in Luxembourg are Google (93.9%), Bing (3.5%) and Yahoo (0.9%), followed by DuckDuckGo and Yandex RU with lower shares.

E-commerce market

According to the latest data available, e-commerce sales in Luxembourg reached EUR 600 million in 2015 (E-Commerce Europe). Eurostat data shows that in 2017 the share of enterprises' turnover on e-commerce in Luxembourg was at 14% (below the EU average, at 18%), while figures from the government show that only 9% of Luxembourg businesses currently have an e-commerce website. The number of individuals having ordered/bought goods or services for private use over the internet in the previous three months in Luxembourg was 69%, higher than the 48% EU average (Eurostat). In total, 79% of all online purchases from Luxembourg were cross-border operations in 2017, a rate which is easily explained by the small dimensions of the Grand Duchy (E-Commerce Europe). In November 2017 the Ministry of Economy launched the platform LetzShop.lu, where local shops can showcase their products online and sell them directly via the internet. Individuals in Luxembourg who carry out online transactions often use online banking (79% in 2017, against a EU average of 61%) and 82 % shop online (EU average at 68%, DESI 2018). People in Luxembourg participate in social networks more than the EU average (70% compared with 65% on average in the EU), though no reliable figures in terms of social media users are available.

Organizing Goods Transport

Main Useful Means of Transport

Luxembourg has an excellent road infrastructure. Air transportation is also facilitated by the presence of a specialized airline company, Cargolux, one of the greatest exclusively cargo companies in Europe. Finally, merchandise transportation by rail is in full development. In 2007, the first long distance plain rail highway began to operate, connecting Perpignan (France) and Luxembourg. Conceived as an alternative to road transport, it allows road transporters to transport by train, without neither tractors nor drivers, overnight 40 tractor trailers, which equals cca 30,000 tractor trailers per year.

Ports

Port of Mertert

Airports

Aviation Administration
The Luxembourg Airport

Sea Transport Organisations

Ministry of Transport Navigation Service

Air Transport Organisations

Direction of Civil Aviation (DAC) of the Ministry of Transport

Road Transport Organisations

Ministry of Transport: Direction of Road Transports

Rail Transport Organisations

Ministry of Transport, Direction of railways
Ministry for the Middle Classes, Tourism and Housing
The CFL rail company

Identifying a Supplier

Type of Production

For the resources for businesses on managing the manufacturing and the supply chain risk due to the outbreak of the Covid19 pandemic, please consult the report COVID-19: Managing supply chain risk and disruption (Deloitte Canada, 2020), as well as the insights on COVID-19: How to fortify your supply chain (Kearney, 2020).
The World Economic Forum's COVID Action Platform provides useful information on the latest strategic trends regarding COVID-19 implications for businesses, including manufacturing and supply systems. The report Outbreak Readiness and Business Impact (World Economic Forum in collaboration with the Harvard Global Health Institute) offers insights on handling coronavirus by businesses and strategies for effective response and resilience.

The plastic/rubber branch represents 13% of the industrial production's added value (fabrication of Good Year Tires). Chemical industry has increased its part in the sector's total production (7%) since the arrival of the TDK Recording Media Europe S.A. company. The steel industry still represents a large share, thanks to the presence of the world giant, Arcelor-Mittal. Finally, Luxembourg also produces numerous non-metal mineral products (glass industry, porcelain production and cement production, concrete and concrete parts production...) which represent around 8% of the industrial production's added value.

To search directories by industry in Luxembourg, check out our service Business Directories.

Professional Associations by Sector

30 professional associations listed for Luxembourg.
Choose your sector Administration, Institutions, Justice, Social servicesArts, Culture, Handcraft, Museums, EntertainmentAutomotive, Lorries, Cycles, MotorcyclesBanking, Finance, Investment, InsuranceBusiness services: Services, OutsourcingConstruction, Real Estate, Architecture, UrbanismHealth, Hospital, Pharmacies, Dental, VeterinaryIndustrial subcontracting, Maintenance, Design, IPMechanical, Railway, Naval, Machinery, Agricultural machineryPrinting, Publishing, Graphic Art, Stamps, CardsScience, Humanities, Research, TechnologySports, Leisure, Hunting, Hobbies, ToysTourism, Travel, Hosting, Bars, Restaurants, ParksTrade, Distribution, Retail, Import/Export

Trade Agencies and Their Representations Abroad

Luxembourg Chamber of Commerce

General Professional Associations

The Union of Luxembourg Enterprises
The Luxembourg Trade Confederation (CLC)

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