Living in Luxembourg: the advantages and disadvantages

Are you thinking of moving to Luxembourg? Although the country is rich, human-sized (640,000 homes) and cosmopolitan (47% expatriates), it can also present a few disadvantages for expatriates. Here's everything you need to know before moving to the Grand Duchy:

What are the advantages of moving to and living in Luxembourg?

Salaries are very attractive

Luxembourg's economy is one of the most robust in the worldwith a GDP per capita in excess of 115,000 euros. This prosperity is directly reflected in the salaries offered to employees.

Salaries in Luxembourg are considerably higher than in neighbouring countries:

• The average annual salary is €73,700, compared with €45,280 in France, for example.
• Minimum wage rises to €2,570 gross per monthThis is 40% more than in France.
• Wages, like the minimum wage, are constantly adjusted in line with inflation. (via indexes)
• Unemployment remains low at 4.7%This reflects a dynamic employment market (up to 2 times less than in some Western European countries).
• More than 41,000 companies are based in the country, offering a wealth of employment opportunities

The financial sector, which accounts for 30% of national employment, offers particularly attractive remuneration packages. Luxembourg is the world's second-largest centre for investment funds, so there are plenty of opportunities for qualified people.

The public sector also offers very good salaries for civil servants and government employees. But it can be more difficult to get a job there as an expatriate.

If you prefer a video, here's what you need to know about the advantages and disadvantages of Luxembourg:

Quality of life

Safety is one of Luxembourg's major assets. The country has one of the lowest crime rates in Europe, regularly ranking Luxembourg City in the top 10 safest cities in the world.

The quality of life for expatriates moving to the Grand Duchy is enhanced by a number of advantages:

• Public transport is completely free throughout the country since 2020, making it easier to get around every day (buses, trams and trains are free)
• The health system is efficient and particularly generous (similar to the German or Alsace-Lorraine models). Basic reimbursements from the CNS are high, even if you do have to allow for a certain amount of extra costs. complementary health insurance or mutual insurance.
• Nature is unspoilt and easily accessible. Over 25% of the surface area of Luxembourg City is made up of green spaces. The forests are accessible on foot from most of Luxembourg's communes.
• It's easy to link up with Europe's major capitalsvia Luxembourg station or Findel airport.

A multicultural and cosmopolitan environment

Luxembourg's multiculturalism makes it much easier for newcomers to integrate. Over 47% of the population is expatriate. With 170 registered nationalities and three official languages (French, German and Luxembourgish), Luxembourg offers a unique environment in Europe.

This diversity offers a number of practical advantages:

• Communication is made easier: 98% of the population speak French, 80% speak English
• It's easy to make friends when you arrive: there are many expatriate groups and multicultural events in Luxembourg
• Children integrate easily thanks to a multilingual educational environment: the Luxembourg school system integrating the three official languages from a very early age
• The country is very open culturally: many international artists and festivals stop off in the Grand Duchy, or were born here

Luxembourg culture is one of the reasons why many expatriates who had planned to spend a few years in Luxembourg end up choosing to live there indefinitely.

Luxembourg's geographical position is strategic

The Grand Duchy is at the crossroads of Europe. It offers exceptional accessibility to the main European capitals, by road, rail or air. This central location is a major asset for both professional and personal life.

The European connections from Luxembourg are remarkable:

• Paris can be reached in 2 hours 15 minutes by TGV. direct from Luxembourg Central Station
• Brussels less than 3 hours away by train, making it easier to travel to the European institutions
• Findel International Airport offers daily flights to 100 destinations
• An efficient motorway network and directly links France, Germany and Belgium

As a result, many expatriates choose to stay in Luxembourg, as they can enjoy good living conditions while being able to return to see their families on a regular basis.

The social system (health, welfare) is particularly advantageous

Luxembourg has one of the most generous family policies in Europe. This makes it a particularly attractive destination for families with children.

Benefits include

• From child benefit in excess of €300 per month per childpaid without income conditions
• From welcome service vouchers (CSA) to finance childcare based on income
• Flexible parental leave 4 to 6 months full-time or part-time
• Free and compulsory education from age 4 with trilingual teaching
• A high-performance healthcare system with universal cover

This explains why Luxembourg regularly ranks in the world's top 10 for childcare and family well-being.

To put it plainly, Luxembourg offers a very good standard of living, but there are also a few drawbacks, not least the cost of living.

Disadvantages to consider before moving to Luxembourg

Despite its many advantages, living in Luxembourg also presents challenges, particularly for expatriates arriving in a new country with new codes. Here are the main disadvantages:

The cost of living is particularly high

The main obstacle to moving to Luxembourg is undeniably the cost of livingwhich is very high compared with neighbouring countries. This has a direct impact on new arrivals' budgets.

The figures speak for themselves:

• The cost of living is 17% higher than in France
• Food products cost up to 25% more than in neighbouring countries
• Services (restaurants, leisure activities) at premium rates in line with local salaries (a pizza in a restaurant can cost €25-30, compared with €10-15 in France or Belgium, for example).
• Many residents do their shopping abroad to reduce their current expenditure

This price inflation can be explained by the country's economic prosperity and the high demand generated by its high-income population. However, salaries in Luxembourg generally compensate for these extra costs, provided you get a well-paid job.

To find out more about the cost of living in Luxembourg, see this article.

The property market is under constant pressure

Accommodation represents the most critical challenge for expatriates in Luxembourg. The chronic shortage of available property is causing prices to soar, which could jeopardise your plans to set up home.

The current property situation :

• Average purchase prices around €11,000/m². in Luxembourg City - that's more than in some upmarket areas of Paris!
• Rents that can be prohibitive: a studio flat costs a minimum of €1,200 per month in the capital
• Largely insufficient housing supply : a vacancy rate of less than 1%
• Competition for accommodation is often fierce: flat visits attract several dozen applicants
• Strict requirements for finding a rental: the income required is often 3 to 4 times higher than the rent.

This property pressure is driving many expatriates to the outskirts of the city or to neighbouring countries, resulting in longer commutes and a poorer quality of life. Some young professionals have no choice but to share accommodation, even on comfortable salaries.

Clearly, property is a major drawback that can put off some expatriates.

Social integration can be difficult

Paradoxically, despite its multiculturalism, Luxembourg poses social integration challenges which is regularly highlighted in surveys of expatriates.

Difficulties with integration can be seen in :

• Local populations sometimes perceived as not very open by 24% of expatriates (compared with 16% on average worldwide) - see InterNations annual survey
• Community compartmentalisation can be observed : with a tendency for expatriates to remain among compatriots in dedicated communities, activities or associations
• A language barrier that can hinder integration: it is sometimes difficult to have genuine contact with locals without a good command of Lëtzebuergesch
• Finally, a social life that can be limited: because of the size of the country ("we've come full circle").

Although not essential for professional purposes, learning Luxembourgish makes it much easier to deal with the locals. That's why more and more expatriates are choosing to learn the local language and to apply for Luxembourg nationality.

The area is fairly small and dense

Luxembourg's small size can quickly become oppressive for some expatriates who are used to wide open spaces or dynamic metropolises. There is also a very 'residential' feel to many of Luxembourg's districts and communes, which may not appeal to very urban expatriates.

Constraints linked to the size of the country :

• Territory of 2,586 km² less than the Paris conurbation
• A feeling of "going round in circles after a few months in residence
• Limited cultural offer compared with major European capitals
• Traffic congestion at peak times despite free transport
• Tight job market with the risk of rapidly "burning out" its opportunities

This geographical limitation also has an impact on social life: everyone knows each other quickly, which can be perceived as reassuring or stifling, depending on your personality. Expatriates seeking urban anonymity may feel uncomfortable in this environment.

Beyond the theoretical advantages and disadvantages, expatriation to Luxembourg requires practical preparation. Administrative formalities, social security, contracts... Consult our complete guide for newcomers to Luxembourg.

Luxembourg vs neighbouring countries: our comparison for expatriates and new arrivals

To give you a better idea of Luxembourg's specific characteristics, here is a comparison with the main indicators for neighbouring countries:

Criteria	Luxembourg	France	Belgium	Germany
Average annual salary	73 700€	45 280€	49 000€	53 200€
Minimum monthly salary	2 570€	1 747€	1 842€	2 080€
Unemployment rate	4,7%	7,3%	5,5%	3,1%
Housing cost (m²)	11 000€	5 500€	3 800€	4 200€

Key facts:

• Luxembourg leads the way in terms of salary levels with a significant advantage, even taking into account the cost of living
• Luxembourg property is the most expensivebut higher incomes partially compensate
• Germany offers the best balance between career opportunities and the cost of living
• France remains attractive for quality of life and ease of linguistic integration

The choice depends on your priorities: maximising income (Luxembourg), life balance (Germany/France) or an interesting compromise (Belgium).

What's life like in Luxembourg?

From people who live here, we can tell you quite openly: compared with other capitals, life in Luxembourg is rather pleasant.

• The environment is soft and pleasant: fairly quiet, there's plenty of room in the bars and restaurants, everything can be reached in 15-20 minutes by car, the streets are generally quiet, and public transport is free.
• Life is perfectly suited to expatriates: almost everyone speaks English. There are many expatriate communities. And you can learn several official languages very easily with theINL and via agreements with employers (part of working time can be dedicated to learning a language)
• There's plenty of entertainment and activities for all the family: huge children's playgrounds everywhere, cultural events all year round with a major theatre, a philharmonic, a fine concert hall (the Rockhal) and internationally renowned artists stopping off in Luxembourg on their tours.
• For those who love hiking, the Grand Duchy is ideal: the forests are accessible on foot from anywhere, and there are a number of hiking spots that are very popular with residents, such as the Mullerthal.
• Some parts of Luxembourg are very lively: perfect for going out in the evening or at the weekend
• Petrol and tobacco are cheaper than in other European countries (which is why so many French, Belgian and German consumers buy their products in Luxembourg).
• There are many career opportunities with very large companies (the Big Four, Microsoft, Amazon, Arcelor Mittal...), particularly in finance, accounting and law.

In terms of disadvantages, here's what you'll find:

• The overall cost of living is higher than elsewhere (This is particularly true of property, food, going out, restaurants and car/home insurance). Many people do their weekend shopping at the border to cut costs (Germany, France).
• It's a small country: you quickly get to know everyone and can have the feeling that you've done the rounds pretty quickly. Some people like it, others don't (unlike other capitals).
• You generally need a car to get around: You can make most of your journeys by public transport, but if you want to go out at the weekend, you'll need a car. So you need to add to your budget.
• There is a very high turnover: Expatriates stay in Luxembourg for an average of 4 to 5 years. They change jobs quite often. This makes it difficult to build long-term relationships.

To find out more about life in Luxembourg, see all our guides for expatriates.