How the Simplified SARL is paving the way for entrepreneurs to launch companies
Luxembourg’s century of uninterrupted economic success boils down to its ability to reinvent itself. In recent years, it has begun another one of its signature revolutionary transitions: from a strictly traditional financial hub into a fintech hotbed.
Likewise, its ICT landscape proves to be fertile ground for the growth of innovative new tech companies.
Why FinTech startups are Choosing Luxembourg for Business?
According to Luxembourg for Finance, the number of e-money and e-payment institutions in the country tripled between 2012 and 2015 and is continuing to grow.
In addition to the obvious factors — funding, innovative thinking and a supportive ecosystem — there are even more elements contributing to Luxembourg’s business attractiveness.
Luxembourg startups enjoy the convenience of a central location and, with an international airport at their fingertips, mobility. The area’s multilingual and multicultural makeup lets it serve as the ideal hub from which to run a panEuropean company.
Laws & Regulations
Another selling point is the CSSF’s willingness to work with Luxembourg fintech startups. Because fintechs do not resemble traditional financial institutions, it is difficult for them to play by the traditional rulebook.
The CSSF, Luxembourg’s regulatory body, is renowned for working collaboratively with these startups, understanding their business models and helping them fully comply with the country’s regulations. It is no coincidence that Europe’s first bitcoin license was issued in Luxembourg.
This time investment and individualized care is something that the regulatory organizations of larger European countries simply cannot afford.
Luxembourg startup ecosystem
The road from struggling startup to success story can be long and arduous. For Luxembourg startups, this is a journey they do not have to make alone. The Grand Duchy’s accelerators and incubators provide a shortcut to growth by offering invaluable experience, resources and partnerships.
- Accelerators: Often a startup’s biggest and most expensive battle is getting to market. Startup accelerators help keep that time as short as possible, removing barriers, providing resources and assisting with scaling issues. Accelerators in Luxembourg can give a young company the international network it needs to reach its markets quickly.
- Incubators: For early-stage startups, sometimes a great idea is not enough to survive. Affordable office space, access to experts and a support system can be the difference between success and fizzling out. Luckily, they can turn to many incubators in Luxembourg whose experience makes them uniquely prepared to help startups overcome hurdles.
Is Luxembourg the next Silicon Valley?
A combination of factors catalyzed the expansion of Luxembourg’s startup ecosystem in a few short years:
- Academia: A brain drain means death to a startup hub, a reality nearly faced by countries like Luxembourg weighed down by aging populations. Conversely, attracting knowledge and building headquarters of learning give birth to innovation. Founded in 2003, the University of Luxembourg has been steadily drawing young, innovative minds back to the Grand Duchy.
- Research: Like Silicon Valley, the Luxembourg startup scene owes its success largely to the proliferation of funding options. Since 2000, government funding has increased its annual research budget tenfold. From 2011 to 2014, the Luxembourg National Research Fund contributed €136 million.
- Venture Capital: Luxembourg’s new €20 million Digital Tech Fund, which invests in digital technology startups is just one example of the financial lifelines available to growing startups. Angel investor events and Luxembourg-based venture capital firms also make Luxembourg an attractive option, particularly for those in the tech field.
- Luxembourg Startup Support: Successful startup hubs depend on momentum — on the snowball effect. Innovative startups watch each other and gravitate toward one another. The view of Luxembourg as a home for young tech companies in the middle of Europe is already spreading. Incubators, accelerators and governmental organizations exist to make the Luxembourg startup path to success as painless as possible.
Luxembourg vs. Silicon Valley
Part of Silicon Valley’s prosperity stems from its reckless abandon, eccentric characters and complete lack of self awareness — in short, factors that are hard to recreate. It was unaware of the genius it was harboring, a state of ignorance ironically central to its success.
However, what Silicon Valley did by accident, Luxembourg is striving to achieve on purpose, with a high level of success. While the two hubs are difficult to compare, Luxembourg has the necessary ingredients to build its own take on the original — one that relies on experience, vast resources, strong financial infrastructure and a desire to attract innovation.
Relocating to Luxembourg? Starting a new company? Questions about local business regulations & requirements? Fiduciary Tucci & Partners can help answer your queries & find solutions.
About Fiduciary Tucci & Partners
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