Luxembourg 15th of April, 2025
Dear Prime Minister Frieden,
My colleagues and I at AMCHAM Luxembourg, wish you, your family and your government a joyful Easter.
As I am now a proud Luxembourg citizen, it is an honour to address you for the first time. I am deeply grateful for the opportunities Luxembourg has provided me since my arrival in September 1992. Over the past 30 years, I have sought to contribute positively to Luxembourg through my tenure at NATO, Clearstream, President of the National Council of Foreigners and my ongoing service as Chairman and CEO of AMCHAM, Luxembourg’s largest private chamber of commerce.
Recognizing Luxembourg’s significant economic and social challenges, my AMCHAM colleagues and I are confident in your government’s ability to guide the nation towards continued prosperity. With that spirit, we respectfully submit for your consideration the following nine-point action agenda for 2025/2026:
1. Ministry of Finance activities
We compliment Minister Roth and his team for the actions they have already taken to reduce the tax burden for companies and employees. While more needs to be done in these areas, most especially including lowering the corporate tax rate to the EU average of 21% (or lower to 20%) to ensure our competitiveness as the preferred European business location, the steps already taken have been very much appreciated.
Likewise, the international business community has very much appreciated the change in tone and attitude implemented within the Finance Ministry. The Ministry of Finance team now treats taxpayers and their issues with greater appreciation, respect, and kinder consideration. Our compliments and thanks to Minister Roth and his team.
2. Regulatory simplification and government cost management
Over many years, the government’s bureaucracies have expanded in both employees and in intrusive, complicated policies and procedures. Our companies often complain that the degree of complexity exceeds their capacity to understand and complete the required paperwork to the point that they have no choice but to hire expensive lawyers and other experts. As a result, new initiatives which could produce both tax revenue and company growth and profits are stifled. We urge the government to take the necessary actions to reduce the reach, simplify and minimize policies to only those absolutely necessary with low-cost compliance by companies assured. At the same time, we believe a smaller, more efficient and lower-cost government is necessary to make Luxembourg stronger, while an ever-larger government bureaucracy makes us weaker and harms our long-term economic prosperity.
3. Banking Access
Luxembourg needs to provide easy access to basic banking services for all residents and companies. Every legal resident and company should be able to open accounts and obtain essential financial services with minimal time delay and bureaucracy upon arrival. These steps will help newcomer people and companies feel welcome, integrate and participate in the economy immediately.
4. Trans-Atlantic Trade and Investment partnership enhancement
The Trans-Atlantic Trade and Investment partnership between the United States and Europe is the engine which has ensured our economic and political freedom and prosperity for many years. We urge all possible actions to expand and strengthen this partnership rather than diminish and weaken it. Despite the current conversations about tariffs, we believe non-tariff barriers are the more significant problem. The current analysis prepared by the Federation of AMCHAMs in Europe, within which AMCHAM.lu is pleased to be one of the seven funding partners for this study, shows that trade and investment between Luxembourg and the United States are mutually beneficial. We encourage the government of Luxembourg to be vocally and privately positive to preserve and further grow this mutually beneficial relationship.
5. NATO cooperation initiatives
We complement and support Luxembourg’s recent decision to build and pay for a second NATO satellite using SES as the Prime Contractor. This is a very smart way to fulfil Luxembourg’s NATO funding obligation while likewise ensuring the money spent stays within the Luxembourg economy. We likewise encourage the government to create a Cyber Corps training and operational capability within the Luxembourg military. Such an initiative will help Luxembourg men and women serve their country using NATO-obligated national funds while, at the same time, developing very valuable digital and cyber security skills needed by NATO, the Luxembourg government and the business entities in which they can be employed after fulfilling their military obligations.
6. Luxembourg Pension reform
We are concerned and would like to avoid a missed opportunity during the just-starting pension reform discussions in the Chamber of Deputies. I have met with and discussed with Minister De Prez the fact that the current Social Security law does not allow employees to delay the start of their pensions beyond age 65 and voluntarily continue to work and make Social Security contributions to enhance their Social Security pension entitlements at a later date when they finally stop working and enter retirement status. There are several groups of persons whose circumstances will benefit from the allowance to delay retirement, continue working, and contribute voluntarily to the old age governmental pension scheme. First, quite many foreigners come to Luxembourg to work after achieving education and work experience outside Luxembourg. As they become interested in remaining Luxembourg residents beyond age 65, many of these people, despite having well-paying jobs during their careers up until age 65, find that a Luxembourg state pension based on frequently less than 15 years of contribution is insufficient to live in dignity and therefore they are motivated to voluntarily continue to work either in new jobs or as independents. Likewise, more and more women, both foreign-born expats and local Luxembourg natives, find themselves with insufficient state pension entitlements because they are taking significant career breaks to raise their children. We have noticed an ever-increasing number of insufficiently entitled retirees who are voluntarily motivated to continue to work beyond age 65 and who wish to be able to delay their retirement start, continue to contribute to the government’s pension scheme and get greater benefits at a later date as a result. While we encourage corporate pensions and private pensions, many people appreciate the safety and security of the government pension scheme. We urge the government to change the law to allow employees more flexibility to voluntarily participate as contributors to the state pension scheme while both delaying their pension start date and growing their investments into the system by contributing while continuing to work until an older age beyond 65 on a voluntary basis.
7. Micro housing actions
We are pleased that AMCHAM.lu has been accredited by the Ministry of Housing as eligible for up to 75% subsidy for developing affordable housing solutions. We are working on three projects. Of particular interest to us is the development of micro-housing solutions for the high-quality, well-educated, single employees needed by many companies. With 95% of housing in Luxembourg being family housing, this target population of needed single employees faces considerable obstacles. Current laws stipulate that housing should not be less than 50 sq meters, and this requirement makes single-person occupancy uneconomically viable. We urge governmental action to allow us and others to create and make affordable 30 sq meter micro-housing units available for single occupancy usage.
We also urge the national and communal governments to take accelerated actions to speed up the planning and approval process so we and others can bring solutions to fruition faster.
8. Empowering citizens through education
As a nation, we are well positioned in Europe. But, with depleted steel ore stock and no other significant natural resources, we find our future largely dependent on our human capital. We have been fortunate to be able to recruit and bring smart, well-qualified and highly motivated people to join our human capital pool and this has served us well. We have also been generous to support refugees in need, but we need to be careful to ensure we do not weaken our prosperity by excessive immigration of people who will become social burdens.
The strongest possible education system is key to empowering and giving the best chance to all inhabitants of Luxembourg to succeed. We believe this is best achieved by a mix of both public and private sector education opportunities. While public sector education is very well funded, we urge the government to assist inhabitants desiring and needing to gain business-related skills and enhance their education via appropriate tax deductibility provisions for business and career education opportunities for both children and adults at all levels which will be lower cost alternatives as compared to public education schemes.
9. Enhanced English language adoption
Over time, English has become the dominant international language. It is relatively simple in construction and, therefore, easy to learn and very widely spoken, read and written. While we encourage new arrivals into Luxembourg to study and learn the three already existing official languages, this takes time. There is a high degree of likelihood that new business arrivals into Luxembourg coming from around the world will be at least minimally fluent in English, except in the case of arrivals from the surrounding neighboring countries.
For similar reasons to support the foreign companies and their employees who we need to attract to Luxembourg, we likewise urge further efforts to ensure English is a medium of communication for all governmental administrative activities, including communal, school, legal contracts, insurance and automobile-related activities, to the greatest extent possible. So, encouraging wider English language fluency and use will make Luxembourg more welcoming for those we want to attract to live and work with us.
Since we also need to prepare our students to live and prosper in the current and future global world, we urge a high degree of attention to ensuring that all of our students are fluent in the English language to a greater degree than they are currently.
Thank you, Prime Minister Frieden, for your attention to this letter.
My colleagues and I are at your disposal to discuss any and all of these initiatives.
With respect and kindest regards,
Paul Schonenberg
Chairman and CEO
AMCHAM.lu