Luxembourg supports reforms to strengthen competitiveness

Luxembourg supports the European Union's ambitious plans to reduce bureaucracy and increase business competitiveness. The new Competitiveness Compass, presented by the European Commission on 29 January 2025, aims to simplify administrative procedures and improve the conditions for the development of enterprises. The Luxembourg Ministry of Economy, headed by Lex Delles, reaffirmed its commitment to these objectives, emphasising that they coincide with national priorities to reduce bureaucracy and support SMEs.

One of the key aspects of the new EU policy is to reduce the administrative burden by 25 per cent for all companies and 35 per cent for small and medium-sized enterprises (PMEs). To achieve this, it is planned to assess all EU rules against the objectives of reducing administrative and regulatory costs, and to analyse more systematically their impact on the competitiveness and development of small businesses. An important step in this direction will be the presentation of the "Omnibus Package" at the end of February 2025, which will aim to simplify European directives and regulations in the areas of sustainable financial reporting, supervisory obligations and EU tax classification (EU-Taxonomie).

The Luxembourg government actively supports these initiatives, stressing the importance of harmonising rules at EU level to ensure a uniform environment for all 27 member states. Other EU legislation is expected to be simplified in the future, and digitalisation of procedures will be a key tool to reduce bureaucracy. Lex Delles noted that the Luxembourg government is developing its position on the basis of the European Commission's proposals and is already planning to adapt national legislation to the new rules.

At the national level, Luxembourg is implementing a strategy to simplify administrative procedures, enshrined in the government's coalition agreement. Particular attention is paid to the principles of "once only" (providing data to public authorities only once) and "Think small first" (taking into account the interests of small businesses when drafting legislation). A draft law on the implementation of the "once only" principle is already under consideration, and on its basis it is planned to introduce a number of measures to reduce bureaucracy and simplify procedures.

The Luxembourg Ministry of Economy uses a bottom-up approach to develop administrative simplification measures. As part of this strategy, members of the Haut Comité PME and other representatives of the business community are consulted. During these discussions, proposals are collected, which are then analysed and discussed with the relevant ministries and government agencies. This makes it possible to take into account the real needs of business and develop more effective measures.

Reducing bureaucracy in Luxembourg is being implemented through a number of measures, including regulatory changes, organisational improvements, digitalisation of procedures, introduction of information technology (ICT) and ensuring better coordination of administrative requirements. These measures are expected to help reduce administrative costs, speed up processes and improve the business environment in Luxembourg.