Investment and Luxembourg Essay

Submitted By victoriahan3366
Words: 1411
Pages: 6


Part I. Introduction and Country Background In the heart of Europe lies one of the world’s smallest nations, Luxembourg. This nation ranks number 179th in holding the title for the smallest territorial sized country, primarily because it is 51 miles long, 35 miles wide, and has a 2,586.4 km² territory span. It is also landlocked, which infers that the nation has no open body of water along its borders. France is its neighbor to the left, Germany to the right, and Belgium to the north. The capital of the small nation, which has a population of only 537,853 thousand citizens, is Luxembourg. These citizens are ruled by a unitary parliamentary constitutional monarchy with the Prime Minister, Jean-Claude Juncker, acting as the head of government and of the multi-party system. The President however is the Grand Duke Henri, and acts as the face of the nation. Because Luxembourg is a unitary parliamentary constitutional monarchy, it has 3 branches of government, similar to that of the United States. Although the nation is very small in size and population, it is very well developed. This includes and is not limited to efficient road systems, railway lines, and air transport facilities and services. However, due to its size, the number of cars per 1000 persons amounts to a ratio of 680:1. Although not all of the citizens may own vehicles, the communication industry (specifically telecommunications) remains unhindered. In fact, Luxembourg is the top 2 in the world in the development of the information and communication technologies partly due to the industry being quite liberalized and significantly developed. The convenience of being connected to all major European internet exchanges is the key advantage for the growth and popularity of telecommunications in Luxembourg.

Part II. Business Proposition In Luxembourg, the portfolio investment in logistics has a solid base for future growth and development in the business market. This investment opportunity is supported by 3 main circumstances. Firstly, the economy of Luxembourg is a rapidly growing sector and is constantly looking for new ways to raise the nations GDP and GNP. Secondly, the portfolio investment in logistics will generate many new jobs for national and foreign persons as well as billions of dollars in revenue. And thirdly, due to the nation’s strategic location in the heart of Europe, success is imminent. These three ingredients will create a recipe for the growth and success of portfolio investment in logistics in Luxembourg.
Part III. Evidence Luxembourg, one of Europe’s finest and most prominent rising economies, is one of the few whose economy is classified as a rapidly growing sector. “More than 80% of the goods and services produced in Luxembourg are bound for foreign markets”, according to Carlo Thelen the Chief Economist and Head of the International Department of the Luxembourg Chamber of Commerce. He states in an interview that the Luxembourgian economy is currently wide open and largely depending on exportation and importation activities. This combined with its size and its people power distinguishes it from any other European nation in the logistical hub category. The implementation of free trade zones by the government, primarily near airports and railway stations promotes a peak economy. The Luxembourgian government hopes to facilitate the trading of valuable resources and goods in order to raise the nations GDP and GNP by instilling the free trade zones. In 2009, the government of Luxembourg adopted laws that placed the nation as a logistics hub, primarily by promoting research and development resources. Special tax regimes were also put into place along with laws regarding intellectual property rights in order to help the logistics hub further develop, even if that was not the foreseeable intention. These circumstances helped “increase the attractiveness of [the] country and build industrial substance” for stakeholders…