Luxembourg is neither an administrative nightmare nor a model of simplicity. In the 2026 edition of the Global Business Complexity Index, published on Monday morning by the TMF Group, the country ranks 49th out of 81 jurisdictions, placing it in the middle of the pack – behind Austria (36th) but ahead of Sweden (53rd). The ranking measures the complexity of the rules applicable to businesses, based on 292 indicators covering legislation, compliance, taxation, accounting, human resources and payroll.
This ranking stands in stark contrast to that of several major European neighbours. Greece remains the most complex jurisdiction in the world, ahead of Mexico and Brazil. France ranks 4th among the most complex, Italy 8th and Belgium 14th. At the other end of the scale, the Netherlands, Hong Kong, Denmark and the Cayman Islands are among the environments considered the least complex.
Complexity by design
For Luxembourg, this complexity is primarily structural. As Europe’s leading fund centre and the second largest in the world, the country operates within an ecosystem where investors, assets, managers and intermediaries often fall under the jurisdiction of several different countries. This reality necessitates a sophisticated legal, tax and regulatory framework, underpinned by an extensive network of tax treaties and cooperation agreements.
The other factor relates to the pace of regulatory change, particularly in the areas of taxation, reporting and compliance. The report highlights more broadly that tax digitalisation, e-invoicing, the OECD’s BEPS rules and Pillar Two are increasing operational demands in the short term, even though they are expected to improve transparency in the longer term.
Digitalisation is therefore a double-edged sword. When it remains fragmented – with public systems that are still insufficiently interoperable or limited data reuse between government departments – it adds a layer of complexity. However, when fully implemented, it can reduce processing times, simplify interactions with the government and boost the country’s competitiveness.
Bank accounts: a topic of international interest
Bank accounts also remain a sensitive issue. For a long time, opening a bank account has slowed down the process of setting up companies, due to AML and KYC requirements. However, a recent reform aims to ease this constraint: Bill 8669 allows the payment of the minimum share capital of a limited liability company to be deferred for up to twelve months after its incorporation, without removing the obligation to subscribe to this capital.
This reform does not abolish anti-money laundering checks, but it does partially decouple the banking timetable from the legal timetable. For start-ups and investment firms alike, the practical implication could be that they can set up more quickly and then finalise the banking formalities at a later stage.
The message conveyed by the rankings is therefore nuanced. Luxembourg remains relatively straightforward to understand within an often more complex European environment. However, its competitiveness will depend on its ability to transform an inherent complexity — that of an international financial centre — into a managed complexity.
