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Luxembourg: Country and Foreign Investment


This page was last updated on 17 June 2020.

The Grand Duchy of Luxembourg is a constitutional monarchy. The current sovereign is HRH Grand Duke Henry (Henri) and the heir apparent is his son, Prince William (Guillaume). Under the grand duke there is an executive cabinet of 12 ministers; legislative power is in the hands of the Chamber of Deputies (Parliament) elected by universal suffrage under proportional representation for a term of not more than 5 years.

The Parliament has 60 members, and there are three main political parties, Christian Democrats, Socialists and Liberals, who alternate as coalition partners and who over time have provided a good measure of stability and continuity. Proposed legislation is reviewed by the Conseil d'Etat, who have some powers to block legislation from continuing to a final vote.

Luxembourger law reflects the country's history: most civil and commercial law is French in origin, while company and penal law has Belgian roots, and direct taxes are essentially those introduced by the Germans during their occupation of the country in the Second World War. EU law is of course adopted into national law and is the source of VAT regulation among other things.



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