€300m to be Dedicated to Financing Startups, Innovation in Luxembourg

On Monday 24 March 2025, Luxembourg’s Minister of the Economy, SMEs, Energy and Tourism, Lex Delles, and the Minister of Finance, Gilles Roth, jointly presented an action plan entitled "Ten Action Points for Startups".

In a joint press release, the Ministries of the Economy and Finance stated that the plan included measures to be implemented within the current legislative period, including the introduction of tax measures, as well as the creation of support for spinoffs and a talent desk. They also announced that the National Credit and Investment Institution (SNCI) will dedicate an additional €300 million over a five-year period to financing startups and innovation in Luxembourg.

As a direct result of the roadmap for the development of the startup ecosystem in Luxembourg, "From Seed to Scale", the implementation of which was confirmed by the 2023-2028 government programme, this action plan is expected to provide tangible support to startups and scaleups in order to further develop the startup ecosystem in Luxembourg. It is the result of close collaboration between the Ministry of the Economy and the Ministry of Finance.

The measures identified in the action plan are structured around three axes: support for the creation of startups; support for scaleups; the overall development of the ecosystem.

Startups

To encourage the emergence of young innovative companies by incentivising private investment, a bill for a tax credit for investment in a young innovative company by individual taxpayers will be introduced. New financial assistance will be implemented, starting in May 2025, to facilitate the creation and financing of spinoffs. This assistance, which can reach an investment of €200,000, will correspond to a maximum of 80% public co-financing, while the remaining 20% must be private funding.

Scaleups

To position Luxembourg as a hub for access to financing for scaleups and facilitate their international growth, a support programme, dedicated to fast-growing scaleups will be officially launched at the end of 2025, based on the experience gained from the pilot programme implemented by Luxinnovation. At the same time, a group of entrepreneurs in residence will be created. Furthermore, beyond the specific tax regime for highly skilled workers already in place, it will be proposed to introduce a tax-advantaged regime for stock option plans granted to startup employees.

To foster innovation and the growth of scaleups and startups, access to skilled talent is crucial, according to the ministries. Luxembourg is reportedly training more and more professionals, but it must also attract international talent to meet the needs of the labour market. Therefore, the Ministry of the Economy will develop a national talent desk concept, in close collaboration with Luxinnovation, Luxembourg’s Chamber of Commerce and the Chamber of Skilled Trades and Crafts. This talent desk is expected to serve as a central point of contact, to support and guide foreign talent wishing to join companies in Luxembourg, thus facilitating their integration into the local economy. This measure will also be an integral part of the efforts to attract, retain and develop talent, coordinated by the Ministry of the Economy.

Ecosystem

To support the overall development of the ecosystem, the action plan focuses, on the one hand, on showcasing our expertise and cutting-edge infrastructure and on the other, on community development.

The development of an "AI Experience Centre", by the Luxembourg House of Financial Technologies (LHoFT), is reported to be continuing to leverage the financial centre’s expertise to attract more fintechs to Luxembourg. The implementation of the "AI Factory" has also been announced. These two projects aim to strengthen Luxembourg's international positioning as an innovation hub, deploying cutting-edge digital infrastructure.

Furthermore, to encourage the complementarity of activities within the ecosystem and bridge the gap in contact between different sectors and ecosystem stakeholders, several key events will be supported. Firstly, a third edition of the Luxembourg Venture Days will take place on Wednesday 22 and Thursday 23 October 2025, with the aim of making it an annual international event for connecting startups and scaleups with investors. Secondly, the LHoFT and Startup Luxembourg are set to develop a series of events to bring together the fintech community with priority innovation sectors such as space, healthcare, automotive and digital technologies, in order to increase cross-sector synergies.

The ministers also announced that the SNCI will dedicate an additional €300 million over a five-year period to financing startups and innovation in the country, beyond the Luxembourg Future Fund 2. The SNCI will offer various instruments/combinations of instruments – equity, mezzanine, debt – to facilitate access to financing for young, innovative Luxembourg companies. Particular attention will be paid to innovative companies whose activities have a ripple effect on the development of strategic sectors such as cybersecurity, deeptech, sustainable development (cleantech, greentech), fintech, healthtech and the space sector.

Minister Delles commented: "With this 10-point action plan, our objective is clear: we want to provide concrete support to our startups and scaleups at every stage of their development, while strengthening the attractiveness of our ecosystem for international talent and investors. The various measures announced demonstrate our joint commitment to making Luxembourg a leading innovation hub in Europe. This plan underlines the crucial role of startups and scaleups as a key driver of innovation for our economy and a cornerstone of Luxembourg's efforts to strengthen its international competitiveness."

Minister Roth added: "Our action plan includes ambitious measures to support startups and scaleups, including in strategic sectors such as fintech”. He explained that by facilitating their development and financing, the emergence of national and international champions will be fostered. He added that, in the coming years, particular emphasis will be placed on financing innovative business models to stimulate growth, employment and the competitiveness of the economy, while making Luxembourg a leader in innovation.

Vincent Thurmes, Chairman of SNCI, stated: "The decision of the SNCI Board of Directors to allocate an additional €300 million to financing startups and innovation over five years is a key element of our strategy aimed at establishing specific sectoral hubs in Luxembourg in a sustainable manner." He noted that the €300 million will be added to the €280 million deployed by SNCI as part of the Luxembourg Future Fund 1 and 2 and will strengthen the institution’s impact through a synergistic effect and an expansion of its range of financing tools.

HOM