How Founding A Startup In Luxembourg Works

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Co-author: Thibaut Ciccone Luxembourg may be small but that doesn't go for its startup scene. Check out these tips on founding a startup in this exciting city!

Luxembourg success across history is interesting at many levels, the country has been able to adapt itself to the world around in a very agile fashion, from an industry focused on steel, the country evolved in a very strong financial place (the 2nd biggest fund manager after New York), for a couple of years a new transformation begins. The country is focusing on innovation, at all levels: from the scientific research, modernized Universities, and indeed a growing up start-up community. If you are interested in biotech, social entrepreneurship, drones, robotics or IT, you should consider Luxembourg.

Why Found In Luxembourg?

Advantages of starting-up in Luxembourg:

  • Luxembourg is located between Germany, France and Belgium. Many European institutions are based in Luxembourg (European Investment Bank, European Commission) but also many big players have their European Headquarter there  (Amazon, AOL, Apple iTunes, eBay, PayPal, Skype, Microsoft, Sony, etc.).
  • Thanks to its central location abovementioned, it is extremely easy to travel to other major startup hubs in Europe, such as Paris, London or Berlin, which are all within one hour’s flying time from Luxembourg.
  • As Luxembourg is a small country in terms of population and size of the territory, a startup can very quickly become a national leader. Startups can also quite easily get access to economic and business decision-makers.
  • Luxembourg is also very cosmopolite (more than 45% of the resident are foreigner) so your startup in Luxembourg will have an international outlook from day one. In that sense, Luxembourg can also be an interesting test-market for startups willing to get diversified feedback from people representing a lot of different cultures.
  • GDP per capita in Luxembourg is the second highest GDP in the world, after Qatar and Liechtenstein. It allows Luxembourg to offer cutting-edge infrastructures, notably regarding IT and network connectivity, which are essential points for many digital startups (SaaS, broadcasting, gaming, etc.).
  • The startup community is very active and friendly. We can mention Startup grind  Luxembourg or Silicon DrinkAbout Luxembourg, which gather the startup community on a regular basis to enjoy drinks and talk about creating and developing a startup in Luxembourg.

What startup founders have to consider:

  • Starting a business in Luxembourg requires the obtention of a “business permit” which can be an administrative burden and/or a loss of time in some cases. However, the Chamber of Commerce is used to dealing with this kind of demands, notably from foreign people.
  • Real estate in Luxembourg is expensive. It can be useful to check renting opportunities outside of Luxembourg city.
  • More generally, salaries are high and getting skilled people to work for your startup will probably cost you more than in other countries. Nevertheless, if your startup complies with Luxinnovation’s criteria you can be eligible to public subsidies, and the attractive tax environment is an asset.
  • Even if Luxembourg is a dynamic country with a vibrant capital offering many bars, restaurants and concerts, the city is not as fast-paced as London or Berlin are.
  • Start-up capital of 12,500 Euros to create a company is off-putting for many budding entrepreneurs. The situation will probably change in a near future, as many discussions are held within business and political circles to simplify the process of setting up a limited liability company (SARL), named the “111 company” (1 day, 1 person, 1 Euro).
  • Don’t forget that Luxembourg remains a small market, whatever its qualities are. Setting up a startup in Luxembourg implies an ability to rapidly expand in other countries in order to get traction and grow.

Looking For People? Where To Go In Luxembourg:

Luxembourg’s startup community is young and growing, making new connections by attending meet-ups is incredibly easy. There are literally dozens of startup events every months.

Luxemburg_guide_community

Here you can find info about upcoming events, meetups and other occasions:

  • Silicon Luxembourg – All the events related to startups happening in Luxembourg can be found on Silicon Luxembourg’s website, the local media spreading news about the startup ecosystem in the Grand-Duchy.
  • Startup grind is a global startup community designed to educate, inspire, and connect entrepreneurs. On their website you can find upcoming events, where local founders, innovators, educators and investors share personal stories and lessons learned on the road to building great companies.
  • Girls in tech is a global organization focused on the engagement, education and empowerment of influential women in technology.
  • Luxinnovation – Public support structures such as Luxinnovation act as a “catalyst” for any startup eager to tap the Luxembourg (or European) market. In parallel, there are a lot of private initiatives dedicated to help startups grow, covering the whole “support chain” (co-working spaces, incubators, mentoring programs, acceleration programs, etc.).

Regular events and meetups:

  • Silicon DrinkAbout – Weekly meetup, casual, where people come and share in a very nice atmosphere.
  • BBQ GameJam – Yearly event, 48 hours to build a video game and enjoy a nice barbecue.
  • Want more? Make sure to check out the agenda.

Yearly or major events, festivals, conferences:

  • ICTspring – The best place to discover new startup or to pitch yours. Easy access to a wide range of decision maker, investors etc.
  • StartupWeekend – Do we need to introduce startup weekend? This is probably most popular and global startup event in the world. The Luxembourg chapter is very cosmopolite with people from all around Europe, the perfect place to meet your co-founder.
  • Global GameJam – This worldwide hackathon got a chapter in Luxembourg. The event is happening in a very good environment, with a lot of fun and interesting results.

Need A Place To Work? Where To Go In Luxembourg:

Luxemburg_guide_coworking

Coworking spaces and offices are blooming in Luxembourg, some are supported by strong initiative from private sectors and the government, some other are really driven by communities of individuals, you can find very modern industrial place around the city or more cosy spaces downtown. Whatever type of entrepreneur you are, Luxembourg offers the right coworking space for you.

Coworking and office spaces in Luxembourg:

  • WishBox offers you a creative and friendly working space.
  • Nyuko is a community and place where people come together to build their business or work on project that matters.
  • Tlpo community  – The Telecom Luxembourg ICT campus provides unique coworking spaces that connects tech startups, global brands, and entrepreneurs through innovative accelerator programs all hosted at our Luxembourg campus.
  • Technoport – A vast, modern coworking space with an industrial style.
  • Greenlab – Right after the border of Belgium, the Greenlab in Arlon is an about to be opened coworking space.
  • 1535°C – 16.000m² spread across 3 industrial building including 400m² dedicated to coworking.
  • Collaborate – A Fintech & IT Business Center located in the heart of Luxembourg-City. The ideal place to nest your startup and to cluster with other innovative companies. From 10 to 50 sqm offices. Park & Play (Hotdesk) availability offered in a beautiful Maison de Maître.

Need Money? Where To Go In Luxembourg:

Luxemburg_guide_financing.

Finding investors in Luxembourg can be achieved in many different ways. You can simply ask around, since the country is not very big, there is a good chance you are connected to the right person already.

In case you are the new guy in town, attend to local meetup like Silicon DrinkAbout and talk about your project (this is how I find startups I invest in).
Otherwise, you’ll have many occasions to pitch in front of a panel of investors, from the yearly ICTspring event, to many smaller events. “Going out of the building” is the key here.

Incubators:

  • Technoport – The technology oriented business incubator’s goal is to promote and support the creation and development of innovative and technology-oriented companies in Luxembourg. Technoport provides either individual entrepreneurs or foreign innovative businesses with access to resources that they typically lack in terms of business support services and infrastructure.
  • Neobuild – The cluster for technological innovation in sustainable construction. The areas of expertise are firstly articulated around the high environmental and energy performance of buildings.
  • The GreenHouse provides a special and unique environment to early-stage innovation startups. The team at The GreenHouse is composed of seasoned entrepreneurs and investors who have a particular passion to help companies grow to the next level.
  • Lux future lab – In the heart of Luxemburg Lux future lab is a physical space to support the development of skills and entrepreneurial projects in an interactive and dynamic environment.
  • House of BioHealth – A unique hosting facility with office and lab spaces, for both established and start-up companies in the field of biotech, clean-tech and ICT.

Accelerators:

  • PwC’s Accelerator  Founded by PwC Luxembourg as the first European platform designed to boost European high-tech companies and provide them with the services they need to expand internationally. Helping innovative high growth companies to go global faster and smarter.
  • Technoport

Grants & Subventions:

  • Help and subventions offered by the government – This section provides comprehensive information on the different forms of bank and non-bank financing available for your business, accounting and financial management and the main types of government aid available.
  • Support from Luxinnovation – Luxinnovation offers companies and innovative start-ups advice and support to prepare applications for state aid.

Crowd Investing Platforms:

  • nubs – NUBS is a one-stop shop for crowdfunding solutions in a regional context.
  • treverimarket is the new alternative global marketplace, joining companies with each other and investors in order to facilitate capital formation and true partnerships.

Angel Investors:

  • LBAN is dedicated to promoting angel investing and supporting early stage investments in Luxembourg. It creates an ecosystem that helps support the industry by bringing together private investors, early-stage funds and promising entrepreneurial ventures.

Venture Capital Investors:

  • Mangrove capital – A bold but patient investment firm helping innovative entrepreneurs start and grow global.
  • Chameleon invest is driving sustainable economic growth by actively supporting passionate entrepreneurs and creating synergies in a dynamic ecosytem.
  • The European investment fund supports Europe’s small and medium-sized businesses by helping them to access finance.
  • DAM Capital management provides flexible capital solutions for middle-market borrowers throughout Europe.
  • Genii Capital is an investment management and financial advisory firm.
  • LPEA is a member based, non-profit trade association.
  • Saphir Capital Partners is an independent private equity firm with an entrepreneurial investment approach.
  • Luxembourg future fund
  • GGM Capital

Other Investment Opportunities:

Need Advice? Where To Go In Luxembourg:

Luxemburg_mentorsSo, you are convinced and excited to settle your business in Luxembourg? If you are reading this part, I assume it’s a YES.

The very first week, you should attend the weekly meetup Silicon DrinkAbout this is best place to connect to the local startup scene – newcomers are very welcome. Share your idea with people there, meet your co-founders, mentors etc…

Now, you are part of the local community, the next step is to build your project, explore your value proposition and establish a plan, people at Luxinnovation will be happy to help (bonus pdf guide).

Take a deep breath, it’s time to file your company in the country, this is where you’ll find all details about it.

All done? Congratulation, that was easy right? Now the real journey begins.

Tips:  80% of the revenue from patent, drawing… are deductible of taxes.

 

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Co-author: Thibaut Ciccone

The guides are like startup communities – they contstantly change and grow. Make sure to check for updates and if you have something to add to one of them or want to publish one for your city, get in touch right away! And don’t forget to enrich the startup ecosystem by creating your company profile at StartUs!

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