As Luxembourg’s financial centre evolves, its commitment to innovation and adaptability places it at the forefront of shaping tomorrow’s financial landscape. With a strategic focus on moving up the value chain, Luxembourg is advancing beyond its traditional strengths in wealth and fund management to include high-value services such as private equity advisory, investment execution, and valuation.
Luxembourg’s forward-looking approach is also reflected in its dedication to integrating new technologies and developing a diverse range of financial products that drive financial inclusion and investor engagement. With advancements in Open Finance, artificial intelligence, and blockchain, Luxembourg is building a future-ready financial ecosystem that supports efficiency, personalisation, and transparency.
The country is also pioneering new investment vehicles, such as European Long-Term Investment Funds (ELTIFs), tokenised funds and active ETFs, that cater to evolving investor demands for tailored, long-term solutions. By embracing these innovations, Luxembourg solidifies its role as a leader in shaping tomorrow’s finance, creating a resilient and competitive European financial market that is equipped to meet the challenges of an increasingly complex global economy.
Moving up the value chain
Our Ambition
Build on the government’s competitiveness agenda and Luxembourg’s growing role as a hub for private equity, real estate, venture capital, infrastructure and debt funds to attract additional middle- and front-office roles in Luxembourg.
Luxembourg’s financial centre is advancing up the value chain by diversifying into high-growth financial services and pioneering digital finance innovations. Luxembourg is now, more than ever, attractive for an increasingly broad range of financial activities, including fundraising, valuation, and investment execution across sectors. This strategic expansion is turning Luxembourg into a key hub for firms seeking sophisticated financial services in Europe.
A growing number of international private equity and venture capital firms have set up fundraising and valuation teams in Luxembourg, capitalising on the country’s favourable regulatory framework and its role as Europe’s premier hub for alternative investment funds. Luxembourg’s expertise in fund structuring, combined with its wide array of vehicles, enables firms to tailor investment structures to meet institutional investors’ specific requirements.
The concentration of specialised skills and expertise in investment execution within Luxembourg is becoming a significant asset. Teams responsible for deal origination, due diligence, and transaction management are increasingly based in Luxembourg, facilitating complex, cross-border investments. Luxembourg’s ecosystem of skilled advisors, fund managers, and legal experts supports this full range of investment activities, streamlining processes for private asset houses operating within the EU. This robust infrastructure allows firms to execute high-value deals with efficiency, which is vital as they expand their reach across Europe and globally.
As a result, Luxembourg has seen the arrival in recent years of new corporate banks, notably from the US and UK, as well as service providers, such as AIFMs and leading international law firms, who follow their clients to Luxembourg. Luxembourg is fast becoming a key jurisdiction for their international expansion, notably in the alternative fund space.
Luxembourg’s value chain expansion is also underscored by its strength in valuation services. As private markets grow more complex, valuation services are increasingly essential for both compliance and strategic decision-making. Luxembourg-based valuation teams leverage the country’s cross-border expertise to provide valuations for assets across multiple jurisdictions. These services are indispensable for institutional investors, high-net-worth individuals, and family offices, particularly those with multijurisdictional investments that require reliable, market-aligned valuations.
Luxembourg will strive to attract additional front-office activities, notably building on its recent success in broadening the activities along the value chain in the private assets space and in corporate banking.
Beyond traditional wealth management, Luxembourg is integrating digital tools and FinTech solutions to enhance service offerings. Private wealth managers are adopting digital advisory platforms that combine traditional advisory services with data-driven, customisable portfolios. This integration of digital solutions supports Luxembourg’s focus on attracting the next generation of investors, particularly those seeking a seamless blend of traditional and tech-enhanced services.
Investing in International Talent
Our Ambitions
Promote Luxembourg as a hub for global talent in the financial sector and enhance Luxembourg’s competitiveness to ensure it remains a destination of choice for global talent.
Through continuous investment in tailored education, skills development, and partnerships with academic institutions, Luxembourg will ensure a future-ready workforce capable of addressing the evolving needs of the global financial ecosystem.
Sustain sustainable growth through a dual focus on developing expertise in sustainable finance and fostering innovation that aligns with the global economic transition.
Luxembourg has introduced a substantial tax package that includes a very attractive expat regime, a more flexible profit-sharing bonus regime to support talent retention as well as incentives for young talents.
To maintain their competitive edge and adapt swiftly to global economic shifts, international financial centres such as Luxembourg must prioritise building a robust pool of skilled professionals. The demand for top talent extends beyond the financial sector, with non-financial companies actively competing to attract these individuals. This intensifies the need for financial centres to provide compelling career opportunities, incentives, and a supportive environment to retain their talent.
In this context, Luxembourg has strategically invested in human capital to reinforce its financial services value chain. Through partnerships with academic institutions and specialised training programmes in areas such as AI, data analytics, blockchain, and sustainable finance, Luxembourg cultivates a highly skilled workforce capable of delivering advanced cross-border financial solutions and driving long-term competitiveness.
Over the past decade, Luxembourg’s financial sector has demonstrated robust growth, with employment increasing by an average of 2.5% annually and added value rising by 5.2% per year. Looking ahead, Luxembourg remains committed to sustaining this momentum by further enhancing its talent ecosystem.
Yearly increase of added value:
The country’s continued success hinges on effective strategies for talent development, attraction, and retention. Initiatives such as data-driven skills gap analyses, like the sustainable training mapping conducted by the LSFI, help identify critical needs. Tailored training programmes and financial education efforts focus on equipping professionals with expertise in key areas, including compliance, risk management, sustainable finance, digital transformation, and leadership.
For the past 25 years, Luxembourg has also actively invested in developing talent abroad, fostering a meaningful global impact in selected partner countries. By sharing knowledge, expertise, and best practices in banking and financial services, Luxembourg supports the strengthening of national financial systems. This commitment reflects the belief that robust financial ecosystems are essential drivers of economic development and resilience in partner countries.
As a multicultural and inclusive hub at the heart of the European Union, Luxembourg fosters an open and welcoming environment. Efficient immigration policies, competitive remuneration packages, and favourable tax incentives attract top global talent, cultivating a vibrant and dynamic professional ecosystem. As of January 2025, Luxembourg has introduced a substantial tax package that includes a very attractive expat regime, a more flexible profit-sharing bonus regime to support talent retention as well as incentives for young talents. These measures help to significantly boost the financial centre’s efforts to attract and retain the talent it needs to sustain its future growth.
Recognising that long-term retention requires more than professional incentives, Luxembourg prioritises a high quality of life for global talent and their families. The country offers world-class infrastructure, country-wide free public transport, international schools, including several free international public schools, free childcare during school term time until the age of 12, excellent healthcare service, attractive social benefits, and a rich cultural landscape — creating an ideal environment for professionals to thrive personally and professionally.
To attract top talent and inspire the next generation of financial professionals, Luxembourg actively promotes the benefits of living and working in the country. Through strategic marketing campaigns and university initiatives, it highlights the diverse career opportunities available in the financial sector.
Giving the Financial Industry the Tech to Thrive
Our Ambitions
Provide access to cutting-edge technology and Fintech firms to support the digital transformation of the financial centre, leveraging Luxembourg’s innovation and R&D ecosystem.
Drive mutualisation efforts to support efficiency gains and innovation within the financial centre.
Leverage Luxembourg’s expertise as a global investment hub to drive FundTech and RegTech innovation.
Embrace artificial intelligence and leverage Luxembourg’s advanced capabilities, including its world-class data centre infrastructure, high-speed internet connectivity and high-performance computing offer, to accelerate the digitalisation of the financial centre.
Act as a testbed for tech firms developing state-of-the-art solutions for the financial industry.
In an increasingly digitised financial landscape, Luxembourg supports established financial firms by providing cutting-edge technological solutions that enable them to remain competitive, compliant, and efficient. By prioritising innovations in RegTech, FundTech, InsurTech, and operational efficiency, Luxembourg ensures that firms have access to the tools they need to adapt to evolving regulatory demands and client expectations.
Luxembourg’s focus on mutualising processes by leveraging its national Fintech hub LHoFT, including in areas such as KYC (Know Your Customer), is a prime example of how the country is driving operational efficiency for financial incumbents. By creating shared infrastructures, Luxembourg will allow firms to streamline compliance checks and reduce the cost and time associated with client onboarding. This shared approach to regulatory compliance is invaluable for firms operating across borders, enabling them to meet EU-wide standards without duplicative efforts – saving them money and time.
The adoption of FundTech innovations in Luxembourg further enhances its position as a financial technology leader. Several startups and tech firms in Luxembourg have specialised in FundTech and RegTech solutions supporting the industry with advanced tools ranging from governance and reporting solutions to fund distribution and tokenisation platforms. Technologies such as Distributed Ledger Technology (DLT) and smart contracts are being integrated into fund administration processes, making Luxembourg a key player in FundTech advancement. These technologies improve fund administration’s accuracy and speed, reduce operational errors, and allow real-time auditing of transactions. By leveraging DLT for fund operations, Luxembourg enables international asset managers to administer cross-border funds more effectively, which is essential as Luxembourg continues to be a major hub for European investment funds.
Additionally, Luxembourg is embracing artificial intelligence (AI) to support risk management and operational automation within financial firms. AI applications, from fraud detection and automated compliance checks to AI-driven client engagement, allow firms to make data-informed decisions with greater precision. Besides operating an innovation hub to help guide firms in launching new digital products and services, the Luxembourg financial sector regulator CSSF became the first regulator to adopt a sovereign cloud solution to develop artificial intelligence tools in view of enhancing performance, efficiency and transparency of the regulator’s activity and interaction with supervised entities.
Leveraging its high-performance computing infrastructure, Luxembourg is also one of seven EU countries that will host a European AI factory with the aim of creating a robust and interconnected network of artificial intelligence hubs, acting as a one-stop-shop for startups, SMEs and researchers. This push for AI integration enhances Luxembourg’s standing as a forward-thinking financial hub where global firms can test and scale new technologies in a regulated environment.
Luxembourg’s commitment to blockchain technology is reshaping the operational models of its financial services industry. The country’s supportive regulatory environment for blockchain, highlighted by four dedicated blockchain laws, facilitates the use of DLT for secure transactions and asset tokenisation. This framework enables firms to experiment with and adopt blockchain solutions, positioning Luxembourg as a leader in blockchain integration within mainstream finance.
Luxembourg’s cutting-edge digital infrastructure provides a robust foundation for its financial sector’s technological innovation and competitiveness.
A notable example of this commitment is the collaboration between the Banque centrale du Luxembourg (BCL) and the European Investment Bank (EIB) in Project Venus. In November 2022, the EIB issued a €100 million digital native bond under Luxembourg law, settled using a tokenised representation of euro central bank money provided by the BCL and the Banque de France. This initiative demonstrated the potential of DLT and central bank digital currencies (CBDCs) to enhance the efficiency and security of digital financial instruments.
For traditional financial firms, these technologies open up new avenues for digital asset management and enhance transparency, compliance, and transaction efficiency. Luxembourg’s cutting-edge digital infrastructure provides a robust foundation for its financial sector’s technological innovation and competitiveness. The country is home to state-of-the-art data centres, including LuxConnect facilities with over 15,000 square meters of server space, certified by the Uptime Institute for reliability. High-speed internet connectivity, supported by a 1,800-kilometre dark fibre network, ensures rapid and secure data transmission crucial for financial operations. Luxembourg’s sovereign cloud initiatives, such as the Clarence and DEEP projects, by LuxConnect and Post respectively, offer compliance with European legal standards and safeguarding data integrity. This is especially important in areas such as finance that rely on heavily sensitive data.
High-performance computing (HPC) capabilities, led by the MeluXina supercomputer, deliver 15 petaflops of peak performance, enabling advanced financial modelling and analytics. Looking ahead, Luxembourg is preparing for quantum computing integration, aiming to combine HPC and quantum infrastructure by 2027, further solidifying its leadership in technological innovation.
Moreover, as one of only seven AI factories in Europe, the new MeluXina-AI, equipped with more than 2100 GPU-AI accelerators, will deliver the multi-exaflopic AI computational power needed to train and fine-tune specialised and optimised AI models.
To foster research and development, Luxembourg actively supports innovation within the financial industry. Notable initiatives include the collaboration between BGL BNP Paribas and the University of Luxembourg’s Interdisciplinary Centre for Security, Reliability and Trust (SnT). This government co-financed project, with an investment of €7.4 million over three years, focuses on developing AI-driven intelligent monitoring systems for secure financial solutions. Firms also benefit from support by the Luxinnovation agency, which acts as a one-stop-shop to advise them in submitting applications for public subsidies, whether in the context of R&D and innovation grants or more specific mechanisms. Combined with Luxembourg’s advanced infrastructure, Luxembourg’s comprehensive innovation and R&D support and incentives ecosystem can help equip financial firms with the tools to stay competitive and innovative in an increasingly digitised global market.
Importantly, thanks to this ecosystem as well as its state-of-the-art infrastructure, Luxembourg can act both as a hub for innovation for financial services firms themselves, but also as a testbed for tech companies that want to develop advanced solutions catering to the specific needs of the financial sector. Indeed, they will be hard-pressed to find a similar concentration of financial institutions and service providers, many of which moreover operate their European or global competence centres in Luxembourg in areas ranging from wealth management to fund distribution.
Shaping Tomorrow’s Finance
Our Ambitions
Position Luxembourg as the leading hub for digital assets and the tokenisation of investment funds, leveraging the country’s pioneering blockchain legislation and its role as global fund distribution hub.
Position Luxembourg as a jurisdiction of choice for serious crypto-asset service providers under MICA.
Build on Luxembourg’s role as an EU hub for payment services and seize the opportunities of Open Finance, to help drive new, data-driven digital financial products and distribution models.
Strengthen Luxembourg’s role as a hub for embedded finance and as a location of choice for financial services for tech firms and e-commerce platforms.
Establish Luxembourg as a key hub for actively managed ETFs in Europe.
Luxembourg is actively shaping the future of finance by creating a robust environment for digital assets, developing Open Finance solutions, and fostering innovative financial models driven by cutting-edge technology. With global finance increasingly embracing digital and data-driven solutions, Luxembourg’s strategy is focused on building a forward-thinking financial ecosystem that supports accessible, efficient, and secure financial services.
Luxembourg’s leadership in digital assets and blockchain is pivotal to its ambition to lead the next wave of financial innovation. The country’s blockchain laws provide a clear legal framework for the issuance, custody, and trading of digital assets, a foundation essential for integrating these new assets into mainstream finance. This legislative environment enables the tokenisation of traditional assets, such as stocks, bonds, and real estate, allowing them to be digitised and traded on secure, transparent platforms. By enabling tokenisation, Luxembourg offers investors benefits like increased liquidity, faster settlement times, and reduced transaction costs, setting the stage for a future where digital assets are integral to financial markets.
Open Finance is a cornerstone of Luxembourg’s vision for a transformative financial ecosystem, enabling seamless, data-driven services across banking, payments, asset management, and insurance. By facilitating data-sharing among institutions with consumer consent, Open Finance empowers users with a comprehensive view of their financial landscape, ensuring personalised solutions and enhanced financial inclusion. Luxembourg’s regulatory environment, supported by European frameworks like FiDA, PSD3, and PSR, is designed to drive data portability and interoperability, supporting not only consumer empowerment but also a highly competitive market. This approach bolsters Luxembourg’s position as a leader in Open Finance, creating fertile ground for FinTech innovation and fostering partnerships that push the boundaries of financial service offerings.
Building on its success as a pioneer in Open Banking and payments under PSD, Luxembourg has laid a strong foundation for secure and innovative financial integration. As FiDA and MiCA come into force, Luxembourg is poised to advance Open Finance further, empowering consumers, fostering competition, and enhancing cross-border financial services.
Luxembourg’s leadership in digital assets dates back to its early adoption of blockchain technology and regulatory frameworks for crypto services, including issuing Europe’s first payment licenses to platforms like Bitstamp and BitFlyer. This pragmatic approach has attracted serious players in the digital asset space and paved the way for projects like HSBC’s Orion digital asset platform and Franklin Templeton’s tokenised money market UCITS fund, who are leveraging Luxembourg’s advanced blockchain legislation. With MiCA providing harmonised crypto regulations, Luxembourg will expand its role as a hub for digital finance, offering a bridge between TradFi and crypto.
By integrating blockchain innovations such as tokenisation Luxembourg is enabling a new generation of financial products that increase liquidity, reduce costs, and streamline operations. As the tokenisation of funds accelerates, Luxembourg’s expertise in fund administration and regulatory clarity positions it as a leader in this transformation. The country’s forward-looking approach ensures that it will continue to drive innovation, blending cutting-edge technology with its established reputation for trust and stability.
Luxembourg has firmly established itself as a hub for embedded finance, catering to the growing integration of financial services within e-commerce platforms and tech ecosystems. Global giants like Airbnb, Alipay, Amazon, and PayPal have chosen Luxembourg as a base for their European operations, leveraging its regulatory expertise, robust infrastructure, and central location to embed seamless payment and financial solutions into their platforms. This reflects Luxembourg’s ability to adapt to the evolving demands of a digital-first economy, supporting the convergence of traditional finance and technology-driven innovation. By providing a stable and forward-looking environment, Luxembourg enables these companies to scale efficiently while enhancing the financial experiences of their global user bases. This strategic positioning underscores the country’s role not only as a hub for financial services but also as a critical partner for the future of e-commerce and digital business models.
Luxembourg’s investment in AI and advanced analytics is also reshaping financial services, allowing firms to make more data-informed decisions and offer personalised solutions. AI applications in Luxembourg are revolutionising risk assessment, fraud detection, and customer engagement, supporting a finance model that is both efficient and secure.
Luxembourg’s strategy is focused on building a forward-thinking financial ecosystem that supports accessible, efficient, and secure financial services.
Further, Luxembourg is fostering new distribution models and investment products, such as European Long-Term Investment Funds (ELTIFs) and active ETFs, that are designed to meet the evolving needs of investors. Active ETFs, for example, combine the benefits of active management with the flexibility and cost-efficiency of ETFs, expanding access to tailored, long-term investment solutions. Luxembourg’s proactive exemption of subscription taxes for these funds makes these products particularly attractive by lowering operational costs for investors. Moreover, in December 2024, the CSSF became the first regulator in Europe to clarify the transparency requirements for active ETFs. Rather than disclosing their full portfolio holdings daily, as traditionally required for ETFs, such information can now be published at with a maximum time lag of one month. This additional regulatory clarity enables managers to better protect their proprietary portfolio management strategies from other market participants.
Active ETFs are increasingly reshaping the global investment landscape, transitioning from a niche product to a key driver of industry growth. In the US, active ETFs have surged in popularity, with assets approaching $1 trillion by mid-2023—a remarkable leap from just $100 billion in 2018, spurred by regulatory changes and investor appetite for more flexible alternatives to traditional mutual funds.
Globally, active ETF launches have grown at a compound annual rate of 48%, with the number of products quadrupling in the past five years. While still a smaller segment of the European ETF market, active ETFs have become a poster child for growth, with assets under management reaching $34 billion as fund selectors increasingly value their potential to generate additional alpha within multi-asset portfolios.
Luxembourg’s strong position as Europe’s leading hub for active fund management provides asset managers with an ideal ecosystem to develop innovative ETF products. A prime example is the first CLO ETF launched in Europe, which was domiciled in Luxembourg, underscoring the country’s role in driving ETF product innovation. By leveraging Luxembourg’s regulatory expertise, including the regulatory clarity provided by the CSSF for active ETFs, extensive fund infrastructure, and its global reputation as a fund distribution hub, managers can efficiently launch share classes and tailor products to meet the evolving needs of European investors. This unique ecosystem positions Luxembourg as a central player in the accelerating growth of active ETFs, ensuring it remains at the forefront of this transformative trend.