FATF status

Luxembourg is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Luxembourg was undertaken in 2023. According to that Evaluation, Luxembourg was deemed Compliant for 28 and Largely Compliant for 11 of the FATF 40 Recommendations. It was rated Highly Effective for 3 and Substantially Effective for 6 of the Effectiveness Compliance ratings.

In 2023, Luxembourg improved its ranking in the Corruption Perceptions Index, becoming the ninth least-corrupt country globally, with a score of 78. The country has implemented various anti-corruption measures, including a whistleblower law and compliance with global anti-money laundering standards, while also addressing transparency issues in government document access. Despite some concerns about conflicts of interest, corruption is not seen as a significant obstacle for businesses, and the legal framework effectively criminalizes bribery and other corrupt practices.

Luxembourg is the third-wealthiest country in the world based on GDP per capita, despite its small size and population. The economy has shown resilience through recent challenges, including a slight decline during the COVID-19 pandemic and a recession in 2023, but is expected to recover to pre-pandemic levels by 2025. The financial sector plays a crucial role, contributing about one-third of GDP, and Luxembourg is recognized as a major global financial center with a strong focus on diversifying its economy into sectors like logistics and information technology.

Luxembourg offers a highly attractive investment climate characterized by political stability, transparency, and a strong focus on growth sectors, particularly in finance and technology. The government actively supports foreign direct investment with no restrictions on foreign ownership, and has implemented regulatory reforms to enhance the business environment. Additionally, Luxembourg's strategic location as a gateway to Europe and its robust financial sector make it a prime destination for international investors.