EY Luxembourg's attractiveness study was presented on Thursday 13 June 2024 by, from left to right: Julien Delpy (head of markets and communications), Olivier Coekelbergs (country managing partner), Bart Van Droogenbroek (partner, tax leader) and Brice Lecoustey (partner, consulting). Photo: EY Luxembourg

EY Luxembourg's attractiveness study was presented on Thursday 13 June 2024 by, from left to right: Julien Delpy (head of markets and communications), Olivier Coekelbergs (country managing partner), Bart Van Droogenbroek (partner, tax leader) and Brice Lecoustey (partner, consulting). Photo: EY Luxembourg

Luxembourg has seen a negligible drop in the number of foreign direct investment projects in 2023 (from 37 in 2022 to 36). But 72% of the entrepreneurs surveyed by EY expect to invest more, and two-thirds expect the country’s attractiveness to grow over the next three years.

After rising steadily since 2019, the number of foreign direct investment (FDI) projects fell slightly in 2023, from 37 in 2022 to 36 last year. This decline is negligible, and does not give any particular picture, as we do not know the size of these investments. “That’s a question we can’t answer, because in the methodology, the declarations are not obliged to mention the amount of the investment,” replies Julien Delpy, head of markets and communications at EY Luxembourg. “And in Luxembourg, there isn’t a specialised agency for this as in other countries, so that limits the data.”

The presentation of the third annual study on the country’s attractiveness, “,” which has existed elsewhere in Europe for 23 years, highlighted an important point: for the third year running, Luxembourg ranked first for the total number of FDI projects per inhabitant (per 100,000 inhabitants), with 5.67 projects per inhabitant, compared with 5.83 the previous year.

“Plans to invest in Europe and Luxembourg are at their highest ever. Seventy-two percent (72%) of executives plan to invest in Luxembourg in the next year, with financial services and utilities the biggest expected drivers of future growth,” says the report, and 60% expect Luxembourg's attractiveness to increase over the next three years.

But the country remains far behind in absolute terms, coming 22nd in the ranking (one place better than in 2022), far behind France, which has 1,194 projects (a figure that has nevertheless fallen by 5% over one year). Despite a 10% drop, business services still account for 44% of FDI in Luxembourg. Finance, business and professional services, and digital and IT software and services are the main sectors generating FDI, with finance leading the way with a 28% market share. The executives surveyed expect financial services and public services to be the main drivers of future growth, with software-digital and IT services moving from first place in 2023 to fourth place in 2024.

“The survey was carried out among 5,000 investors in Europe and 150 in Luxembourg. We asked them about their perceptions and their intentions to invest,” explains Delpy. “The survey was carried out in February-March, so we attribute this willingness to invest to the arrival of the new government. But now the country needs to capitalise on this.”

This article was first published in French on . It has been translated and edited for Delano.

Related articles