Luxembourg - Market Overview

Canada’s single most significant export to Luxembourg in 2015 was aircraft and aircraft parts. The removal of 22 percent tariffs on aircraft parts will make it even more attractive for Canadian aerospace manufacturers to export to Luxembourg.

Luxembourg’s population is extremely affluent; per capita GDP was over US$ 102,700, the highest in the world^{Footnote 7}. Luxembourg is thus a natural market for premium-quality specialty agricultural or seafood products, and the reduction of tariffs on these products will make selling to Luxembourg simpler and more lucrative.

Vehicle exports represented 1.2 percent of the $205.4 million in exports from Canada to Luxembourg. Affluent Luxembourg is a natural market for high-quality automobiles. The removal of steep tariffs on imported automobile products – previously up to 22 percent – will make the Luxembourg market even more attractive.

Luxembourg’s internationally-competitive clean-tech sector focuses on waste management, water treatment and eco-construction and is a focus of the country’s economic diversification plan. The sector is highly co-operative internally; a majority of companies execute collaborative R & D and innovation projects as part of the ‘EcoInnovation’ cluster. Luxembourg thus presents a highly receptive (although competitive) market for exporting eco-friendly products, as well as a great place to import high-quality Clean-Tech products from. Canadian clean-tech companies establishing themselves in Luxembourg can expect highly-educated, multi-lingual employees with a great deal of support from the government.

Luxembourg’s manufacturing industry is growing as part of the country’s new economic diversification plan. With its high per-capita personal income, Luxembourg is a strong market for premium-quality consumer products.

Machinery, precision and technical instruments, electronics and electrical machinery and equipment represent a large portion of Canada’s exports to Luxembourg. High-quality and specialized machinery also holds a large part of Canadian imports from Luxembourg. NATO’s supply and procurement agency is headquartered in Luxembourg and awards billions of dollars in contracts annually – 550 Canadian companies have already been awarded contracts.

Luxembourg ranks 9th place worldwide in the 2016 WEF Network readiness index, compared to Canada’s 14th. Canada’s bilateral trade in services with Belgium and Luxembourg totaled $1.7 billion in 2014^{Footnote 8}. SES, a massive Luxembourgish commercial satellite communications group, is active in Canada. Luxembourg is known for having employees with excellent ICT infrastructure and know-how. Given Luxembourg’s central location and its inhabitants’ exceptional language skills– many Canadian companies have used the country to recruiting personnel and to open up offices.

Luxembourg’s domestic Life Sciences industry features many SMEs and public research laboratories focused on personalized medicine, diagnostics, bioinformatics and HealthIT. There is a supportive business environment and substantial public investment, reflecting the government’s goal of making the Grand Duchy an attractive destination for health sciences research and a world leader in molecular diagnostics. Many Luxembourgish Life Sciences firms innovate and research together as part of the Luxembourg BioHealth Cluster, which also supports international businesses interested in establishing themselves in, or doing business with, the Luxembourg market.

Luxembourg has a highly-productive domestic mining and metal-works industry; top imports were iron, steel, aluminum, as well as articles constructed from those metals. Much of the $60.8 billion Luxembourg invests into Canada targets the mining industry, especially for diamonds and iron.