Legal System

Luxembourg’s legal system is based on civil law and a number of its laws are based on French or Belgian legislation. More and more legislation in Luxembourg amount of is the result of European Union regulations, directives and decisions.

Civil law, also called Continental law or Romano-Germanic law, is the most prevalent legal system in the world. The main difference between civil and common law is that that common law draws abstract rules from specific cases, whereas civil law starts with abstract rules, which judges must then apply to the various cases before them. In other words, historically speaking, common law is based upon traditions and laws are codified following court rulings. On the other hand, in the case of civil law, laws are first codified and then applied.

Currency

Official name: Euro

Currency code: EUR

Abbreviation: €

Exchange rate: free floating/flexible

Official users: Austria, Belgium, France, Finland, Germany, Greece, Ireland,

Italy, Luxembourg, Monaco, the Netherlands, Portugal, San Marino, Slovenia, Spain, and Vatican City.

Unofficial users: Andorra, Kosovo, and Montenegro

Pegged by: BAM, BGN, CVE, KMF, XPF, XOF, XAF, EEK, LTL, LVL, MTL

Privacy

At this time the government of Luxembourg has not signed a Tax Information Exchange Agreement with the United States although it has signed a Mutual Assistance Treaty with the United States. Moreover, Luxembourg is only a transitional participant in the European Union Savings Directive and thus has not agreed to share personal information with other nations. As such, Luxembourg does offer a high level of privacy protection to both American and European Union citizens. Luxembourg’s refusal to share information with either the European Union or American government suggests a strong commitment to maintaining the privacy of their offshore investors.