Luxembourg became one of the six founding countries of the European Economic Community, which later the European Union. Luxembourg joined the euro currency area in 1999. The establishment of the Luxembourg Stock Exchange and the 1929 laws on holding companies marked the beginning of the international financial sector. Luxembourg’s collective investment undertakings (organismes de placement collectif or OPC) dates from 1983, with the passage of the first law on unit trust companies (sociétés d’investissement à capital variable or Sicav).
Private banking, investment funds and insurance are the leading elements of the financial sector, which contributes about 20% of Luxembourg’s annual GDP.Luxembourg's investment fund sector has attracted 20% of the EU market and is the world's largest after the US.
The full corporate tax rate is 30.38% (2004). The 30.38% rate includes corporate income tax (including a 4% employment fund contribution) of 22.88%. municipal business tax at an effective rate of 7.5%, or 6.98% for business undertakings not subject to income tax. Rates vary among regions.
Latest available figures
Official name: Grand-Duché de Luxembourg. Administrative divisions: 3 districts (Luxembourg, Diekirch, Grevenmacher), 12 cantons, 118 municipalities.
Population (2003 estimate Eurostat)
451,000. Luxembourgish (national language), German (administrative language), French (administrative language)
Currency (January 2004)
US$1 = €0.79 euro
Luxembourg has judicial courts and tribunals (three Justices of the Peace, two district courts, and one Supreme Court of Appeals); administrative courts and tribunals (State Prosecutor's Office, administrative courts and tribunals, and the Constitutional Court). The judges for all courts are appointed for life by the monarch.
A mix of parliamentary democracy and constitutional monarchy. The monarch is hereditary and is head of state. The unicameral Chamber of Deputies (Chambre des Deputes) is made up of 60 seats. Members are elected by direct, popular vote to serve five-year terms. The head of government is the prime minister, elected by the Chamber of Deputies and appointed by the monarch. A Council of State serves as an advisory body to the Chamber of Deputies. The Council of State is made up of 21 members appointed by the monarch on the advice of the prime minister.
Head of state: Grand Duke Henri (since 7 October 2000)
Prime minister, finance, state: Jean-Claude Juncker
Deputy prime minister, civil service and administrative reform, foreign affairs and external commerce: Lydie Polfer
Agriculture, viticulture and rural development, middle class, housing and tourism: Fernand Boden
Communications, cults employment, relations with parliament: Francois Biltgen
Cooperation humanitarian action and defence, environment: Charles Goerens
Culture, higher education and research, education and vocational training, public works: Erna Hennicot-Schoepges
Economy, transportation: Henri Grethen
Family, social solidarity and youth, promotion of women: Marie-Josee Jacobs
Health, social security: Carlo Wagner
Interior: Michel Wolter
Justice, treasury and the budget: Luc Frieden
National education, professional training and sports: Anne Brasseur
Secretary of state for the environment: Eugene Berger
Elections were last held on 13 June 1999. Christian Social People's Party (CSV) 19 seats, Democratic Party (DP) 15 seats, Luxembourg Socialist Workers' Party (LSAP) 13 seats, Action Committee for Democracy and Justice (ADR) 6 seats, Green Party five seats, Marxist and Reformed Communist Party two seats. The next elections are due to be held by June 2004.
Gross domestic product (2003 estimated)
Real gross domestic product growth: 1.2%. Gross domestic product at market prices: €23.1 million
Inflation rate (CPI) (November 2003)
Labour force (December 2003)
Public holidays (2004)
1 January (New Year's day), 9 April (Good Friday), 12 April (Easter Monday), 20 May (Ascension), 31 May (Whit Monday), 23 June (National holiday), 1 November (All Saints Day), 25 December (Christmas Day), 26 December (St. Stephen's Day).
GMT plus one 1 hour. The clock goes forward one hour at 1:00 on the last Sunday in March and back to normal time at 1:00 on the last Sunday in October.
CIA Fact Book