Residents or non – residents of Luxembourg have the possibility to open a bank account. Opening a bank account in Luxembourg s a necessary step to incorporate a company in Luxembourg, as the minimum required share capital must be deposited with the bank.
How to open a bank account in Luxembourg
In general, the only documents needed to open a bank account in Luxembourg are a valid passport or identity card and a proof of address, such as a utility bill. However, in order to use all the facilities and services that the bank has to offer, such as credit cards or debit cards, proof of income will be also required. Non – residents will also need to provide a work contract or a letter from their employer.
Some banks in Luxembourg allow their clients to open an account online, but the relevant documents need to be sent by post to the bank.
Savings accounts are offered by all banks and the interest rates vary from bank to bank. A special tax is paid on accumulated interest.
Luxembourg’s banking system is a very favorable one for non – residents, as fewer taxes apply in comparison with other European countries.
Ho to use a bank account in Luxembourg
Most banks in Luxembourg are open from Monday to Friday between 9 AM and 4.30 PM. Some banks are also open on Saturday, however smaller branches are often closed during lunchtime.
Checks are used only in certain types of transactions in Luxembourg, such as property transactions. Banks do not deliver checkbooks for individuals and foreign checks are not accepted as payment in local shops.
Debit cards are most commonly used in Luxembourg for all kinds of payments. A debit card is knows as a V PAY. This card is issued when opening a bank account and it allows the holder to use ATMs for a wide range of transactions.
A debit card is provided if the client is able to justify their income in Luxembourg. For non – residents, it is required to provide an employment contract. Otherwise, obtaining a debit or credit card requires leaving a lump sum into an escrow account.
Credit cards are issued widely in Luxembourg. Credit card statements are sent on a monthly basis and clients can choose to pay the full balance at the end of the month or a percentage of the outstanding balance on a monthly basis.
The Post in Luxembourg also offers full banking services and has longer opening hours than most banks. Statements of postal accounts are issued on a daily basis with no extra charge, as long as at least one transaction is carried out.
All banks transfer money overseas in the chosen currency. International payments may include transaction charges.
Private banking in Luxembourg
Private banking is an important aspect of the banking system in Luxembourg. The private banking system is in compliance with strict secrecy laws set by the EU. Starting with 2013, Luxembourg is accounted with 6% of the world’s private banking business.
Being an important sector in Luxembourg, the banking industry an especially the private banking industry has attracted many foreigner who opened bank accounts in the country.
However, Luxembourg has signed various financial treaties with EU countries, as well as with the US that stipulate the exchange of information in order to avoid money laundering or tax evasion.
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