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Data Centers in Luxembourg

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Luxembourg – Europe’s Secure Digital Hub

Executive Summary

Luxembourg is the premier market for financial services, FinTech, and regulated industries that demand the highest levels of data security and privacy. Its central European location, stable political climate, and favorable tax regime make it a strategic hub for ensuring compliance and delivering low-latency performance to key economic centers.

Luxembourg: At A Glance

FactorRating / DataNotes
Global Connectivity GradeBSolid European connectivity, but not a primary global hub like Frankfurt.
Direct Cloud On-Ramps0 – as of September 2025Access via Frankfurt; private network extensions are common.
Power Cost€0.25/kWh – as of December 2023Above the EU average, reflecting high service standards and import reliance.
Disaster RiskVery Low (1.0/10) – as of September 2025Minimal exposure to significant natural hazards like earthquakes or cyclones.
Tax IncentivesYesFavorable corporate tax regime and participation exemptions attract technology investment.
Sales Tax17% VAT – as of September 2025One of the lowest standard value-added tax rates in the European Union.

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: There are 5 major data center providers operating 6 facilities, with access to over 30 unique network carriers, as of September 2025. The market provides a strong selection of carrier-neutral colocation facilities, ensuring competitive connectivity options.

Direct Cloud On-Ramps: 0 direct on-ramps and 0 cloud regions are located within Luxembourg, as of September 2025. Secure, low-latency access to all major cloud providers, including AWS, Google Cloud, and Microsoft Azure, is achieved via dedicated connections to the primary European hub in Frankfurt.

Internet Exchange Points (IXPs): The primary IXP is the Luxembourg Internet eXchange (LIX). It facilitates efficient local traffic peering and improves network performance and resilience within the country.

Bare Metal: Bare metal compute is widely available from multiple providers. Service options include providers like Leaseweb and IONOS, which are well-suited for workloads requiring dedicated, high-performance hardware.

Power Analysis

Average Cost Of Power: Industrial power costs average around €0.25/kWh, as of December 2023. This price is higher than some EU neighbors, a factor to weigh against the market's high security standards and tax benefits.

Power Grid Reliability: Luxembourg's power grid is highly reliable and stable. Data centers in the region are typically supported by redundant connections and multiple substations to ensure consistent uptime for mission-critical applications.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers in Luxembourg are strategically located to serve the country's world-class financial services and banking sector. This proximity enables secure, low-latency connections essential for financial transactions and sensitive data processing.

Regional Market Reach: Luxembourg serves as a digital gateway to over 60% of the EU's GDP within a 500km radius. This location offers excellent low-latency reach into Germany, France, and the Benelux countries.

Tax Advantage For Data Centers: Luxembourg offers a significant tax advantage through its favorable corporate tax regime and participation exemption policies. These incentives reduce the overall tax burden on technology investments and international operations.

Natural Disaster Risk

Luxembourg has a Very Low natural disaster risk profile, with an INFORM Risk score of 1.0 out of 10, as of September 2025. The risk of business disruption from natural events is minimal.

The most relevant, though still low, environmental hazards are:

  • River Flood (2.9)
  • Drought (1.3)
  • Earthquake (0.1)
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