Why bring your FinTech business to Luxembourg?



With all the media attention on “brexit” there is a renewed interest by companies who want to take full advantage of the European Financial Services market in examining locations outside of the UK.  Once again cities in Europe are positioning themselves as the next hub. Paris, Frankfurt, Dublin and more certainly all have their advantages.  We have seen the German FDP taking the initiative driving around the City of London advising start-ups to “keep calm and move to Berlin”.  In choosing a location for FinTech business, entrepreneurs need to consider key aspects: the business environment, market access, regulatory and government support.  We believe is well positioned with respect to these aspects coupled with a unique set of advantages.


Luxembourg has a track record in evolving the economic environment to suit the needs of the time.  Over the last 50 years Luxembourg has transformed itself from an iron and steel centre to a global financial centre and media hub, with two home-grown European giants in the field, RTL Group in media and SES (Société Européenne des Satellites) in satellite transmission.

Developing a strong FinTech industry has naturally become a key focus as Luxembourg hopes to capitalize on its international character and openness to innovation. Finance represents 36% of GDP, the creation of a vibrant FinTech hub is high on the political agenda. Luxembourg’s small size and agile government machinery provides a unique environment for FinTech including:

  • Ease of access to key governmental decision makers at ministerial level.
  • Prime Minister who, himself, takes responsibility for the development of the ICT sector.
  • An active ecosystem supported by a ‘Can Do attitude’.
  • A strong regulatory authority that is open minded to innovation and willing to move fast.

Market access

As a ‘gateway to Europe’ Luxembourg is at the heart of European decision making and is quick and efficient at transforming EU directives into practical applications which have been influential in attracting many key players to setup their operations in Luxembourg including PayPal, Amazon Payments, Rakuten, and Yapital.  EU “passporting” regulations allow companies based in EU member states to operate throughout the European Union.


Luxembourg has created an active and vibrant ecosystem including incubators and accelerators, law firms, service companies, IT hosting companies, university with its research centre, data centres, and financial expertise.

This ecosystem, stimulated by innovation funding and supported by pro-active and pragmatic approach to regulation, has enabled an industry hub of over 150 FinTech companies. Many are small start ups such as Digicash in mobile payments, Mangopay, a crowd funding platform or , part of the crypto-currency value chain.

The reason they give for coming to Luxembourg is access to Talented ‘International’ People (Luxembourg has the highest number of developers in the world per capita) and an active tight knit ecosystem, with a ‘can do’ attitude that incorporates private business, public research organisations and government bodies such as regulators and innovation agencies. For the period 2016-2020, Luxembourg will spend 200M€ promoting research, development and innovation.

In February, Minister of Finance, H.E. Pierre Gramegna, announced a project to create the LHoFT, the Luxembourg House of Financial which will provide a place for companies from Finance, Technology and FinTech to interact amongst themselves and with research and government actors to develop ground-breaking concepts.


As a founding member of the EU, Luxembourg has a real influence on its strategic direction, particularly in the area of the regulation of new financial products. Currently it is moving faster than UK and Germany on crypto-currency regulation, Luxembourg recently made history by becoming the first member state to issue a license to crypto-currency exchange Bitstamp.

The Luxembourg regulator CSSF (Commission de Surveillance du Secteur Financier) has created an Innovation, Payments, Markets Infrastructure and Governance department responsible for financial innovation, payment services, markets infrastructures and general and transversal aspects relating to governance and remuneration in the financial sector.

“Luxembourg’s regulatory approach has contributed to the development of an important payment services industry which generates nowadays an ecosystem of highly innovative products”, says Nadia Manzari, Head of Innovation, Payments, Markets Infrastructure and Governance, at the CSSF.


As a global leader in specific financial niches and with renowned experts populating the research institutes, Luxembourg has fast access to financial and technology talent to deliver game changing ideas.

The University of Luxembourg, one of the youngest universities in Europe, announced in January the establishment of a FinTech lab as a part of its interdisciplinary centre for Security, Reliability and Trust (SnT).  Professor Björn Ottersten (Director of SnT) explains, “the coming years will see a transformation driven by technological advances and Luxembourg must be at the forefront if it wishes to maintain its current position. SnT can play an instrumental role as an R&D partner positioning corporate partners and increasing their competitiveness.”

The Luxembourg Institute for Science and Technology (LIST) is another important piece of the puzzle with a strong focus on FinTech research.


As home to major payment systems in Europe, mission critical infrastructure is a must have.  Luxembourg has invested heavily in internet infrastructure and is home to 40 percent of Europe’s tier IV data centres — the most robust and secure favoured by financial companies.

Funding Opportunities

For start-ups, Luxembourg’s “Fit for Start” scheme offers early-stage funding and coaching to ICT start-ups in Luxembourg. The programme is intended to help fund the development of a prototype and to provide start-ups with support in their early phase.

The Luxembourg Government announced the launch of a seed fund, created jointly with a group of private investors, to support the financing and development of start-ups operating in the field of ICT. Named the ‘Digital Tech Fund’, the fund was set-up on the initiative of the Ministry of the Economy as part of the national “Digital Lëtzebuerg” initiative.

For more established companies, the national level “Law of 5 June 2009 relating to the Promotion of Research, Development and Innovation” provides for financial support to companies who launch innovation activities in Luxembourg. The support is particularly adapted to the needs of Small and Medium-Sized Enterprises and allows granting specific support to R&D&I Projects or Programmes, Process and Organisational Innovation in services and “De minimis” measures (discretionary, capped aid measures, to enable enterprises and private research organisations to benefit from public funding if these entities are not eligible for a specific aid schemes).

As a base in the European Union, Luxembourg can provide a means to benefit from European Union-wide schemes including access to the EU’s €74bn Horizon 2020 fund, aimed at driving innovation within the EU. Together with the Juncker plan, this represents significant funding opportunities for companies located within the EU market.

In addition there is an abundance of private funding opportunities including the Luxembourg Business Angels Network (LBAN) – a strong and active community of business angels and seed capital investors in Luxembourg.

Want to find out more?

As an independent member of the FinTech innovation ecosystem in Luxembourg, FinnoLux have developed a number of services to help growth-mode FinTech companies to establish themselves in Luxembourg.  We are able to help you by:

  • Identifying unique business opportunities for your company/product, leveraging our extensive network and industry experience.
  • Facilitating introductions to the research organizations, universities and government agencies for research- related projects.
  • Providing assistance in accessing funding, both locally and at EU level.
  • Identifying customers, interesting business collaborations and investors.
  • Advising in the tailoring of your product to meet the needs of the European market.

We have put together a unique package of services which bring together all required pieces to setup and (re)locate your FinTech business in Luxembourg. Our partners include:

  • Accountants
  • Lawyers and notaries
  • Relocation agents
  • Office space providers
  • Real estate agents
  • Recruitment agencies (both locally and pan European)
  • Sales and marketing
  • Events
  • Industry associations

Luxembourg Key Facts

  • Located in Western Europe, Luxembourg is situated between France, Belgium and Germany.
  • Population 563 000
  • Founding member of the European Union, OECD, United Nations, NATO, and Benelux.
  • 65 000 employed in Financial sector.
  • Luxembourg is highly stable, AAA rated by Standard & Poor’s, Moody’s and Fitch.
  • Home to 143 and 324 insurers
  • Second largest investment fund centre in the world (first is the United States), number 1 in global fund distribution
  • Premier private banking centre in the Eurozone
  • Leading Renminbi centre in Europe
  • Largest domicile for Islamic funds in Europe
  • Hub for e-commerce and e-payment companies

If you would like to know more about bringing your business to Luxembourg, please see our website at http://www.finnolux.com and feel free to get in touch.

[linkedinbadge URL=”https://www.linkedin.com/pulse/why-bring-your-fintech-business-luxembourg-matt-elton” connections=”off” mode=”icon” liname=”Matt Elton“]  is Cofounder at Finnolux and this post was originally published on linkedin.