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Data Centers in Luxembourg City

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Luxembourg City – Secure Hub for European Data

Luxembourg City is a premier market for enterprises requiring high security, data privacy, and low-latency access to the European Union's financial core. Its stable, low-risk environment and favorable business climate make it an ideal location for mission-critical infrastructure, ensuring operational resilience and protecting revenue streams.

Luxembourg City: At A Glance

FactorRating / DataNotes
Global Connectivity GradeAExcellent fiber density and carrier access serving a major financial hub.
Direct Cloud On-Ramps0 – as of September 2025Nearest major cloud hubs are in Frankfurt; access via private network extensions.
Power Cost€0.25/kWh – as of December 2023Industrial electricity rates are competitive for high-security European markets.
Disaster RiskVery Low (1.0/10) – as of September 2025Minimal exposure to significant natural disasters, enhancing uptime and reliability.
Tax IncentivesYesGeneral participation exemption and a favorable corporate tax regime are available.
Sales Tax17% VAT – as of September 2025One of the lowest value-added tax rates in the European Union.

Network & Connectivity Ecosystem

Luxembourg offers a robust and secure connectivity environment, purpose-built for the financial services and digital media industries that anchor its economy. The market features 12 carrier-neutral data centers and 4 service providers as of September 2025.

Carrier Density & Carrier Neutrality: With over 4 distinct network providers, Luxembourg City provides solid carrier diversity. The ecosystem is characterized by high-quality, resilient fiber networks connecting to major European hubs.

Direct Cloud On-Ramps: There are no public cloud on-ramps located directly within Luxembourg as of September 2025. Secure, low-latency connectivity to all major cloud providers, including AWS, Google Cloud, and Microsoft Azure, is achieved via dedicated circuits to Frankfurt, the nearest primary cloud region.

Internet Exchange Points (IXPs): The Luxembourg Commercial Internet Exchange (LU-CIX) is the primary peering point in the country. It enhances local network performance by keeping traffic within Luxembourg, reducing latency for domestic users and services.

Bare Metal: Bare metal server options are available, providing dedicated compute resources for performance-intensive applications. Providers like OVHcloud offer solutions within the region.

Power Analysis

Luxembourg's power infrastructure is stable and reliable, reflecting the country's high standards for critical infrastructure supporting its financial sector.

Average Cost Of Power: Industrial power is priced at €0.25/kWh as of December 2023. This cost supports the operation of high-availability facilities required by financial and regulated industries. The grid mix consists of 26% renewables and low-carbon sources, with the remainder from fossil fuels as of September 2025.

Power Grid Reliability: The national power grid is well-engineered and highly reliable. Data centers in the region are typically supported by redundant power feeds from multiple substations, ensuring excellent uptime for critical workloads.

Market Access, Business & Tax Climate

Luxembourg is a strategic gateway for businesses targeting the European Union, offering exceptional financial and regulatory advantages.

Proximity To Key Business Districts: Data centers are located to serve Luxembourg's dense concentration of financial institutions, banks, and EU agencies. This proximity is critical for applications demanding the lowest possible latency for transaction processing and data analytics.

Regional Market Reach: From Luxembourg, businesses can effectively serve a large, affluent population across Germany, France, and Belgium. Its central location makes it an ideal disaster recovery site for primary operations in Frankfurt, Paris, or Amsterdam.

Tax Advantage For Data Centers: Luxembourg's tax policies are a significant draw. The country offers a favorable corporate tax regime and a participation exemption, which can reduce the tax burden on dividends and capital gains for qualifying international firms.

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. This stability is a key advantage for data center operators and their customers, minimizing the threat of environmentally-caused service disruptions.

The primary, albeit low, natural hazards include:

  • River Flood: 2.9/10
  • Drought: 1.3/10
  • Earthquake: 0.1/10

Risks from tsunamis, tropical cyclones, and coastal floods are negligible due to the country's inland location.

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