New tax credit boosts startup investment in Luxembourg

Starting in 2026, individual investors in Luxembourg can benefit from a 20% income tax credit on direct equity investments in eligible startups. The measure, capped at €100,000 per year, aims to mobilise private capital and strengthen the country’s innovation ecosystem. It complements Luxembourg’s extensive range of public funding programmes, for which the country is internationally recognised.

A major step for startup financing

Access to early-stage funding is often a challenge for young companies. This tax credit makes investing in these businesses more attractive to private investors, which means startups can secure financing faster. By requiring investors to stay engaged over several years, the measure fosters stability and gives startups the time they need to grow and innovate. The introduction of this tax credit signals Luxembourg’s determination to boost innovation and competitiveness, and represents a key step in reinforcing its startup ecosystem.

Key conditions at a glance

To make the most of this opportunity, both startups and investors need to meet specific requirements:

For startups:

• Incorporated less than five years ago
• Workforce below 50 employees with at least 2 people working full time
• Annual turnover or balance sheet total under €10 million
• Strong innovation focus, with at least 15% of operating costs dedicated to R&D

For investors:

• Must be private individuals, excluding founders and employees
• Minimum investment of €10,000 per company
• Maximum investment of €1.5million per company
• Shares held for at least three years to ensure long-term support

Check out the Startup Luxembourg Dealroom and discover startups in the Luxembourg ecosystem.