Luxembourg unveils action plan to boost start-ups

The Luxembourg Minister of the Economy, SMEs, Energy and Tourism, Lex Delles, and the Minister of Finance, Gilles Roth, jointly presented an action plan entitled “10 Action Points for Start-ups“.

This announcement was made by the Government of Luxembourg on 24 March 2025.

This plan includes concrete measures to be implemented during the current legislative period, such as the introduction of tax measures, the creation of support for spin-offs, and the establishment of a “talent desk”. They also announced that the National Credit and Investment Company (SNCI) will allocate an additional EUR 300 million over five years to finance start-ups and innovation in Luxembourg.

Directly derived from the “From Seed to Scale” roadmap for the development of the start-up ecosystem in Luxembourg—whose implementation was confirmed by the 2023-2028 government programme—this action plan aims to provide tangible support to start-ups and scale-ups to help strengthen the ecosystem. It is the result of close collaboration between the Ministry of the Economy and the Ministry of Finance.

“With this 10-point action plan, our goal is clear: we want to provide concrete support to our start-ups and scale-ups at every stage of their development, while enhancing our ecosystem’s attractiveness to international talent and investors. The various measures announced demonstrate our joint commitment to making Luxembourg a leading innovation hub in Europe. This plan highlights the crucial role of start-ups and scale-ups as key drivers of innovation in our economy and as a cornerstone of Luxembourg’s efforts to strengthen its international competitiveness,” said Minister of the Economy, SMEs, Energy and Tourism, Lex Delles.

Minister of Finance, Gilles Roth, said, “Our action plan includes ambitious measures to support start-ups and scale-ups, particularly in strategic sectors such as fintech. By facilitating their development and financing, we are helping to create national and international champions. In the coming years, we will prioritise funding for innovative business models to stimulate growth, employment, and competitiveness, while positioning Luxembourg as a leader in innovation.”

“The SNCI Board’s decision to allocate an additional EUR 300 million for start-up and innovation financing over five years is a key part of our strategy to establish sector-specific hubs in Luxembourg sustainably. This funding will complement the EUR 280 million deployed through the Luxembourg Future Fund 1 and 2, reinforcing our impact through synergies and an expanded range of financing tools,” added Vincent Thurmes, President of SNCI.

Structure of the Action Plan

The measures identified in the action plan are structured around three main areas:

Supporting the creation of start-ups
Accompanying scale-ups
Developing the overall ecosystem

Start-ups

To encourage the emergence of innovative young companies by incentivising private investments, a draft law will be introduced to grant a tax credit for investments in innovative young companies by individual taxpayers. Additionally, a new financial aid scheme will be launched in May 2025 to facilitate the creation and funding of spin-offs. This aid, which can reach up to EUR 200,000, will cover a maximum of 80% public co-financing, with the remaining 20% requiring private funding.

Scale-ups

To position Luxembourg as a hub for scale-up financing and facilitate their international growth, a dedicated support programme for high-growth scale-ups will be officially launched at the end of 2025, building on the experience gained from the pilot programme run by Luxinnovation. At the same time, a group of entrepreneurs-in-residence will be created.

In addition, beyond the existing specific tax regime for highly skilled workers, a favourable tax scheme for employee stock option plans in start-ups will be introduced.

Access to qualified talent is crucial for fostering innovation and growth in both start-ups and scale-ups. Although Luxembourg continues to train more professionals, it also needs to attract international talent to meet market demands. Therefore, the Ministry of the Economy, in collaboration with Luxinnovation, the Chamber of Commerce, and the Chamber of Skilled Trades, will establish a national “talent desk”. This desk will serve as a central contact point to support and guide foreign talent wishing to join companies in Luxembourg, thereby facilitating their integration into the local economy. This initiative will be part of broader efforts to attract, retain, and develop talent, coordinated by the Ministry of the Economy.

Ecosystem Development

To support the overall development of the ecosystem, the action plan focuses on two key areas:

Showcasing Luxembourg’s expertise and cutting-edge infrastructure
Strengthening the start-up community

The development of an “AI Experience Center” by the Luxembourg House of Financial Technology (LHoFT) continues, aiming to leverage Luxembourg’s financial expertise to attract more fintech companies. Additionally, the implementation of the “AI Factory” has been announced. Both projects will reinforce Luxembourg’s international position as an innovation hub by deploying state-of-the-art digital infrastructure.

Furthermore, to enhance cross-sector collaboration within the ecosystem and bridge gaps between different industries and stakeholders, several key events will receive support:

The third edition of the Luxembourg Venture Days will take place on 22-23 October, with the goal of establishing it as a major annual international event connecting start-ups and scale-ups with investors.
LHoFT and Startup Luxembourg will develop a series of events bringing together the fintech community with priority innovation sectors such as space, health, mobility, and digital technologies, to increase intersectoral synergies.

Funding and Strategic Sectors

During the press conference, the ministers reiterated that SNCI will allocate EUR 300 million over five years for start-up and innovation financing beyond the Luxembourg Future Fund 2. In practice, SNCI will offer various financing instruments, including equity, mezzanine, and debt financing, to improve access to funding for Luxembourg’s innovative young businesses.

A particular focus will be placed on innovative companies that drive growth in strategic sectors, such as: